Gotham Gazette http://www.gothamgazette.com/component/tags/tag/509 Wed, 20 Feb 2019 03:36:21 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) E-Scooter Companies Ramp Up Lobbying for State and City Authorization http://www.gothamgazette.com/city/8293-e-scooter-companies-ramp-up-lobbying-for-state-and-city-authorization http://www.gothamgazette.com/city/8293-e-scooter-companies-ramp-up-lobbying-for-state-and-city-authorization birdride inc

(photo: @BirdRide)


With Governor Andrew Cuomo proposing the legalization of electric bikes and scooters in New York and the New York City Council considering several bills to achieve that goal, the two prominent e-scooter firms looking to do business in the state are ramping up efforts to lobby lawmakers and other officials.

Bird and Lime are barnstorming New York with lobbyists as they seek to expand into what could be a massively profitable market. The e-scooter companies have already established a presence in hundreds of cities across the United States and the globe, presenting their products as affordable “micro mobility” alternatives that get people around while reducing carbon emissions and traffic congestion.

It’s an appealing argument that has been embraced as part of the broader public transit conversation by many elected officials and transit and street safety advocates, particularly in New York City with its crumbling subway system, slow buses, and crowded streets. And that argument is being spread widely through hundreds of thousands of dollars spent on lobbying.

At the state level, Cuomo has proposed giving municipalities the authority to legalize both e-bikes and e-scooters, which many, including Mayor Bill de Blasio and City Council Speaker Corey Johnson, argue would need to happen first if the city is to act.

“Authorizing these transportation alternatives in a sensible and safety conscious manner will provide cheaper and more environmentally friendly transit options to New Yorkers and visitors who can use these options for work or leisure,” said Jason Conwall, a spokesman for Governor Cuomo, in a statement. The proposal includes mandates for the use of helmets, reflective gear, a bell or horn, and a maximum speed limit.

“It will also attract new businesses and generate job opportunities for New Yorkers, and align the state with many other states and cities that have successfully brought this technology to their residents,” Conwall added.

De Blasio has seemed open to legalizing e-scooters, though he has emphasized that public safety must be the first priority. “If I can see something that will create safety in this city and allow people to use e-bikes or e-scooters, I’m very open to that,” he said at an unrelated news conference in November. But while he is in favor of pedal-assist e-bikes, he has strongly opposed legalizing e-bikes with throttles, citing safety concerns, though without evidence.

At de Blasio’s behest, the NYPD has been cracking down and confiscating e-bikes, which are often used by immigrant delivery workers, and fining individuals and businesses (most of the fines are levied against individuals, as reported by Gothamist in January, contrary to de Blasio’s professed plan to target businesses). Meanwhile, the city launched a pilot dockless-bike program last year in July -- in partnership with Lime, CitiBike, and Jump -- which allowed pedal-assist bikes, which are similar to throttle bikes but run at slower speeds.

Scott Gastel, a city Department of Transportation spokesperson, said the de Blasio administration is reviewing the governor’s proposal. “If the State takes action to provide a local path to legalization, there will be a conversation about what makes sense for New York City,” he said in an email.

The City Council is already pushing that conversation, however, through four bills that were debated at a transportation committee hearing last month where Department of Transportation Commissioner Polly Trottenberg raised concerns about the “unregulated, illegal nature” of e-bikes and “particularly their speeds and irresponsible use by some.”

The bills in question -- sponsored by Council Members Fernando Cabrera and Rafael Espinal -- would remove restrictions against e-scooter and e-bike use, create a program to help throttle-bike owners to convert them to pedal-assist bikes, and create a pilot scooter-sharing program.

“Legalizing electric scooters and throttle electric bikes may seem like distinct issues, but they share a common theme: transit equity,” said Espinal, in a statement, “the principle that all people – particularly marginalized communities – deserve affordable, accessible, and safe transit options that get them where they need to go, whether that be for a job, a social engagement, or anything else.”

For certain City Council members, lobbying by e-scooter firms has presented a golden opportunity to attach e-bikes to the conversation, providing what they say is much-needed justice for immigrant delivery workers who have suffered under de Blasio’s crackdown.

“There’s no doubt that the reason that we’re talking about e-bikes today again is because of the money and the power that has been wielded by these tech companies, these e-scooter companies,” said Council Member Carlos Menchaca, in a brief interview outside City Hall. Menchaca has been among the most vocal critics of the mayor’s enforcement policy on e-bikes, calling the crackdown “discriminatory.”

Over the last year, Bird Rides Inc. has hired several firms to represent its interests including Blue Suit Strategies, Connelly McLaughlin & Woloz, the Mirram Group, Dickinson Avella Vidal, and Tusk Strategies, which has close ties to Council Speaker Johnson and is known for its successful effort in helping the ride-hailing service Uber avoid new regulations in New York City in 2015 (those regulations did pass in 2018).

David Estrada, Bird’s chief legal officer, is among several Bird employees who have also registered as lobbyists in New York. By the end of 2018, Bird had spent about $142,000 on its lobbying effort, according to city and state lobbying records.

Those efforts are ongoing and Bird signed retainer agreements with several of firms to work throughout this year. Blue Suit, for instance, signed an agreement to be paid $3,000 each month through March 2019 to lobby before city officials. Connelly McLaughlin & Woloz signed on for a $6,500 monthly retainer through the end of the year. The Mirram Group’s contract, which extends till August, is expected to cost $10,000 per month. Ostroff Associates is expected to receive $5,000 each month till the end of July. And Tusk Strategies’ contract was the costliest, at $25,000 per month for the full year.

Neutron Holdings, Lime’s parent company, similarly hired James F. Capalino & Associates, Urban Strategies, and Yoswein New York to lobby local and state officials for both e-scooter legislation and for expanding its dockless bike share service into New York.

“We are working with both state and city officials to improve transportation options for all New Yorkers,” said Phil Jones, Lime’s senior director of East Coast Government Relations & Strategic Development, in a statement. “Shared dock-free scooters can make transportation reliable and affordable for all New Yorkers—especially underserved communities that do not have easy access to mass transit.”

The company had already spent about $146,000 by the end of last year and plans more. Capalino & Associates’ contract runs through the end of 2019 with a $10,000 monthly retainer. Urban Strategies was retained to work for the company through the end of May for $5,000 each month.

Menchaca is adamant that e-scooter legalization should only happen along with e-bikes, and the e-scooter firms also seem on board since it advances their interests. “I was very clear from the beginning...that we’re not even talking about e-scooters till we figure out what’s going on with the e-bikes and fix that problem,” he said. “They understood that so they’re gonna play...They’re savvy. We’ll do it together.”

And he seemed to partly excuse the de Blasio administration, even as he criticized the “discriminatory focus from the NYPD” on immigrant workers. “We can’t move that much because of the state, the state needs to move to unlock our ability to legislate this,” he said. “So I wouldn’t say that the administration’s not listening.”

Does the mayor really care? “I think we’re gonna make the mayor care,” Menchaca said.

Council Member Antonio Reynoso sees the issue as indicative of a larger de Blasio problem. “The way we’re thinking about it is we’re gonna leverage the lobbying effort made by the e-scooters to make sure that we get justice for the e-bike folks,” he said in a brief interview in the Council Chambers at City Hall.

“I think it’s less about whether or not the mayor cares about lobbyists and immigrants and more about the mayor just being bad on transportation policy,” he added. “Let’s put it in perspective. Who it affects, how it affects them is kind of second to the mayor not understanding that he’s a proponent of car culture in a significant way. So whether it’s e-scooters or e-bikes, I think to him, who’s advocating for it is second to just bad policy.”

De Blasio finds himself increasingly isolated in his position. E-scooters and e-bikes are one of those rare issues where the interests of transit and street safety advocates on the ground line up with those of large firms with a profit incentive.

“It is indeed disturbing to continue to see Mayor de Blasio...continuing to criminalize the use of an e-bike which is an efficient, sustainable mode of transportation,” said Marco Conner, deputy director of Transportation Alternatives, in a phone interview he gave while riding a CitiBike, the bike-sharing program that de Blasio has expanded and which started to offer pedal-assist bikes as part of the city’s L-train shutdown mitigation plans. “Meanwhile, he’s en route to inviting e-scooter-share companies and has also legalized pedal assist e-bikes.”

Conner said the mayor’s argument that e-bikes are illegal and so the NYPD must enforce the law doesn’t hold water, particularly considering the mayor’s rhetoric about making New York the “fairest big city in America” with strong “sanctuary city” protections. The crackdown, he noted, exposes low-wage immigrants to the criminal justice system, opening them up to potential interactions with immigration authorities. “Every New Yorker jaywalks daily. Police officers jaywalk daily,” Conner said. “That’s illegal under local statute but you don’t see that kind of targeted crackdown.”

He also suggested that the city should institute a buy-back program for e-bike owners, similar to the NYPD’s regular gun buy-backs that take guns off the streets.

Conner did have concerns, however, about the governor’s legalization proposal, particularly the helmet and reflective clothing requirements, which he said are “well-intended” but would discourage the use of e-bikes and e-scooters. It would also harm the existing CitiBike program, which doesn’t require either, he pointed out.

“Helmet sharing is not a thing and will never be a thing,” he said, while the reflective clothing rule is “a recipe for subjective and racially disparate enforcement.” The governor’s proposal also gives motor vehicles the right of way over e-bike and e-scooter riders, which Conner said should be reversed.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

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E-Scooter Companies Ramp Up Lobbying for State and City Authorization Tue, 19 Feb 2019 05:00:00 +0000
In Budget Testimony, De Blasio Critiques Cuomo Plans, Presents City Albany Agenda http://www.gothamgazette.com/city/8275-in-budget-testimony-de-blasio-critiques-cuomo-plans-presents-city-albany-agenda http://www.gothamgazette.com/city/8275-in-budget-testimony-de-blasio-critiques-cuomo-plans-presents-city-albany-agenda de Blasio city hall budget

Mayor de Blasio (photo: Ed Reed/Mayor's Office)


Mayor Bill de Blasio received a warmer reception in Albany on Monday than he has in past years as he testified before the state Legislature on Governor Andrew Cuomo’s 2020 executive budget proposal and how it would affect New York City. Over the course of more than two hours, the mayor argued for more education funding, emphasized the need for a comprehensive revenue plan for the MTA, enlisted legislators to help fend off proposed funding cuts and costs shifts, and defended his administration’s work on multiple fronts.

In prior appearances before the Legislature, de Blasio has faced the ire of Republicans who controlled the state Senate and have used the annual budget hearing to criticize the mayor’s policies and management of the city. But with Democrats now in control of both legislative chambers, the mayor found himself largely in agreement with lawmakers and their priorities on everything from school aid and transit funding to criminal justice reform, rent regulation and marijuana legalization.

He called on the Legislature to give the city design-build authority for infrastructure projects, pushed for the expansion of a speed camera and red light camera program in the city, asked for repeal of Section 50-a of the state civil rights law, which prevents disclosure of police officer disciplinary records, and advocated for a commercial vacancy tax to fight a crisis of vacant storefronts in the city.

De Blasio appealed to the Legislature to aid New York City in avoiding what he said is nearly $600 million in proposed cuts and cost shifts included in the governor’s budget. He reiterated the city’s slightly more rocky budgetary prospects that he raised in his own $92.2 billion preliminary budget proposal last week, where he noted that his administration is implementing a PEG (program to eliminate the gap) for the first time, with the goal of $750 million in total savings across agencies by the time the mayor releases his own executive budget plan in April (at which point he’ll also have to factor in the final state budget, which is due by April 1). City agency cutbacks, he warned, would be exacerbated if the governor’s budget passes in its current form.

The mayor blamed nearly half the Cuomo “cuts” on education funding. Those include a $148 million shortfall in mandated spending on charter schools and special education services and a newly proposed school funding formula that de Blasio said would create a “winners and losers situation” by shifting existing funding away from needy schools. “Although I am certain the proposal’s well-intended, there are real problems with it,” he said under questioning from Assemblymember Ed Braunstein. The governor’s office has disputed de Blasio’s characterizations of “cuts,” noting that some of the mayor’s assessment is based on faulty expectations by the city.

De Blasio also insisted, as he has often done, that the state should provide full funding under the Campaign for Fiscal Equity decision, which would mean about $1.2 billion in additional fair student funding for the city. “We should all be outraged that something that was decided by our highest court to help our children….somehow has not been brought to full fruition,” he later said. Again on this topic, Cuomo has disagreed with the mayor’s interpretation, which is shared by many Democratic officials, with the governor saying that the Campaign for Fiscal Equity has been paid off and is a thing of the past.

De Blasio did commend the governor for backing a three-year extension of mayoral control of city schools, which Republicans often used as a cudgel against the mayor in order to extract concessions from the city. At Monday’s hearing, the mayor was able to tout his administration’s success with little pushback, pointing to record-high graduation rates.

Senator Robert Jackson, however, did prod the mayor for more accountability within the system. “I don’t believe in control...I believe in authority with oversight at an appropriate level,” Jackson said.

De Blasio was willing to concede, “The phrase might be better called mayoral accountability.” At various points, he said that his administration is seeking greater input from parents on issues such as school closures and consolidation, though it could always do better. And he also defended his authority to appoint the schools chancellor through a discretionary process. A nationwide public process would undermine the city’s ability to hire top-notch educators, he said. “The power of [mayoral control] is, everyone here and all the parents of New York City get to hold me accountable,” he said. “That was not true in the past.”

Legislators focused a significant amount of time on the MTA and proposals to find sustainable sources of revenue for the beleaguered authority, responsible for the subways and buses, while making its operations more efficient. Cuomo has proposed a congestion pricing system with some details left undetermined, but that would, among other things, give the Triboro Bridge and Tunnel Authority control over city streets. And he has said the city should split halfway any remaining MTA capital shortfall after congestion pricing revenue is counted. The governor has also been railing against the MTA structure and leadership, who he appointed, and has been arguing for greater control of the agency, which he already effectively controls.

De Blasio has rejected congestion pricing as a silver bullet to solve the MTA’s woes and has said he would prefer a millionaire’s tax to raise the requisite funds for subways and buses. He repeated that argument at the hearing and said the MTA would need a “multi-element” solution that includes several different long-term streams of revenue, including perhaps a mansion tax, an internet sales tax, and revenue from legalization of recreational marijuana use, and a lockbox to ensure congestion pricing revenue is not diverted away from the MTA. Splitting capital costs with the state, he said, would be overly burdensome on the city’s already massive ten-year capital plan, which hit $100 billion for the first time when he released it last week.

He also insisted he could only support a congestion pricing plan that had “hardship exemptions”, which went down well with some legislators but not others. For instance, Senator Jim Gaughran, a Long Island Democrat, agreed, saying he hadn’t seen a feasible proposal yet. He suggested a regional program that could also take into account commuters who use the Long Island Rail Road and bus systems, and a carve out for small businesses. Democratic Assemblymember Bobby Carroll of Brooklyn, on the other hand, said the mayor’s insistence on a progressive congestion pricing proposal seemed “disingenuous” since various carve outs would render the program insufficient.

“I think it’s a balance point,” de Blasio responded. “I think there’s a way to figure out what is a fair hardship exemption and what is not, what does it do to our revenue and what revenue we need.”

And though de Blasio has feuded with Cuomo over blame for the MTA’s failings, he generally supported the concept of giving more control to the governor. “I liken it to mayoral accountability for schools,” he said.

De Blasio also found himself defending his role in the deal to bring an Amazon campus and an estimated 25,000 to 40,000 jobs to Queens, which would give the tech giant $3 billion in tax incentives and grants. To persuade Amazon, the mayor and governor struck an agreement to circumvent the local City Council-led land use process, drawing widespread criticism.

De Blasio insisted on Monday that the $3 billion in incentives the company will receive is out of the city’s control -- most of the tax breaks are as-of-right incentives that Amazon would receive like any other company based on its location and job-creation, and $500 million of it is coming from the state in a capital grant. And he also revealed that he did not negotiate with the company to ensure neutrality if its workers attempt to unionize. When asked by Senator Jessica Ramos, a former de Blasio aide, he said he only insisted that the campus be built by union labor and that building services jobs should go to union workers. De Blasio has repeatedly said that he will continue to put pressure on Amazon related to its approach to employee unionization, and that the larger New York City pro-union environment will also play a role.

In back-and-forth with lawmakers, de Blasio also made promises, some concrete and some speculative. He said that a commission looking at the city’s property tax system would release its recommendations this year. He said the city could shave years off the Rikers Island jail closure plan if a variety of criminal justice reforms are passed by the state. He said he would work with legislators to introduce a commercial vacancy tax bill in the coming weeks. And he promised to invest in improved bus service in the city even if congestion pricing does not come to pass.

Of course, there were moments when de Blasio also pushed back. Senator John Liu, a Queens Democrat and 2013 primary opponent, pushed the mayor on his “seemingly magical solution” to expand healthcare access to 600,000 uninsured New Yorkers at an eventual cost of $100 million annually. Liu wondered whether that would mean the state could pass a single-payer program that doesn’t include New York City. “I would like to say yes to that but I can’t,” de Blasio responded, noting that single-payer healthcare would be a better option.

Assemblymember Nicole Malliotakis, a Republican who ran against de Blasio in 2017, noted that the mayor was raising alarms about budget shortfalls in the city while also increasing spending by $3 billion. “If we are anticipating all these problems with less revenue coming into the city, why are you continuing to increase the budget dramatically?” she wondered. She also asked the mayor to cap increases of the city’s property tax levy, one of the few tax burdens under the city’s control.

De Blasio did agree that the city needs a “more equitable solution” to property taxes though he disagreed that the city should cap the levy. He also defended the city’s budget more broadly, emphasizing that much of the increased spending has gone to pay increases for the municipal workforce in new labor agreements reached under his administration which had lapsed for years.

The state Legislature will continue budget hearings over the next few weeks before each house -- or perhaps both houses together -- release responses to the governor’s proposal. First, Cuomo will release 30-day amendments to his budget plan. Negotiations will heat up in March as the April 1 state budget deadline looms.

[Read: 9 Key Takeaways for New York City from Cuomo's State of the State and Budget]

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

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In Budget Testimony, De Blasio Critiques Cuomo Plans, Presents City Albany Agenda Mon, 11 Feb 2019 05:00:00 +0000
Citing Causes for Concern & Promising Cuts, De Blasio Presents Still-Growing Budget Plan of $92.2 Billion http://www.gothamgazette.com/city/8266-citing-several-causes-for-concern-de-blasio-presents-still-growing-budget-plan-of-92-2-billion http://www.gothamgazette.com/city/8266-citing-several-causes-for-concern-de-blasio-presents-still-growing-budget-plan-of-92-2-billion may bill de blasio fiscal 20

Mayor de Blasio presents his budget (photo: Ed Reed/Mayoral Photography Office)


When Mayor Bill de Blasio presented his preliminary budget proposal last year, he issued solemn warnings about the threats posed by cuts in the state budget and from federal maneuvers that could mean fewer resources for the city. On Thursday, de Blasio repeated that message, but in more dire terms, as he unveiled a $92.2 billion spending proposal for the 2020 fiscal year that starts July 1.

While the plan calls for another significant annual increase in spending -- about $3 billion, or 3.4 percent, from the budget adopted last June -- the mayor also said his administration would have to make difficult decisions in the coming months, instituting a new savings program to find efficiencies in city government while ensuring that front-facing services do not suffer.

“We have some tough choices up ahead under any scenario,” de Blasio said in City Hall’s Blue Room. “We will be guided by the need to make hard choices, to find savings and then when we have to choose, we will favor the priorities that we believe are most strategic and high impact. If a program is nobly intended but not as strategically central or not as valuable, that’s where you will find the cuts.”

The mayor’s proposal will soon become the subject of City Council hearings, and the mayor will be in Albany on Monday to testify at a state budget hearing, where he will tell legislators they must help him undo elements in Governor Andrew Cuomo’s executive budget plan, which the mayor said totaled about $600 million in proposed cuts and cost shifts to the city.

The $3 billion in increased city spending outlined in de Blasio’s preliminary budget includes about $1 billion additional spending stemming from recent contract agreements with labor unions, $632 million in added education spending, $358 million in debt service costs, $325 million in fringe benefits for city employees, $113 million in mandatory charter school spending, and $109 million to expand the city’s 3-K for all program.

Overall, the preliminary budget represents a nearly $20 billion increase since the last budget modification before de Blasio took office in 2014.  

But de Blasio cautioned of an economic recession on the horizon, the symptoms of which are already beginning to show and are forcing the city to tighten its belt. The city is projecting that personal income tax revenue would be $935 million less this fiscal year than last year, for instance, with most of the drop off in December and January revenue collections. (Similarly, Governor Andrew Cuomo announced earlier this week that the state is expecting a $2.3 billion shortfall because of lower income tax revenue. De Blasio noted that Cuomo had already looked to the city to make up state deficits before the recently-announced shortfalls.)

Along with those concerning tax receipts, de Blasio pointed to additional pressure from developments at the state and federal levels. He pointed to the proposed Cuomo cuts and cost shifts that the city may have to bear in spending on education, financial assistance and health services for needy families, and spending for at-risk youth. “These are permanent cuts...when these cuts occur in the state budget, it’s not just for one year. The money goes away, never comes back,” he said, promising to oppose them but conceding that some losses may happen despite the city’s best efforts. 

The governor's administration later sought to rebut the mayor's comments on decreased education funding. "We don't know how the City considers a $282 million school aid increase over last year a cut, and a cut from what you ‘expected’ to get is a bizarre concept," said Morris Peters, a Division of Budget spokesperson, in a statement. "The state has a formula that outlines what the funding increase will be year to year – so why the City would expect to get something higher than that is nonsensical and a pure fabrication."

The threat to the city emanating from Washington is far less certain. The federal government faces a February 15 deadline to reach a budget agreement and preempt another disruptive government shutdown. If that agreement fails, de Blasio said the state would lose about $500 million every month starting in May, with the city losing about $110 million monthly. There are the more nebulous effects of the fluctuations in the stock market, which have been partly to blame for lower city revenue, and federal trade policy.

Taking those factors into account, the mayor announced that for the first time since he took office in 2014, he would institute a PEG (Program to Eliminate the Gap), which former Mayor Michael Bloomberg employed to control agency costs. Unlike Bloomberg’s program, however, de Blasio does not plan to institute a citywide percentage-based cut in spending at all or most agencies. Instead, he said he will direct most if not all agencies to cut a collective $750 million in costs by April, including by expanding a partial hiring freeze that the city estimates has saved $448 million since it was announced in April 2017. Each agency will receive a target figure for spending cuts from the city’s Office of Management and Budget, de Blasio said.

The preliminary budget also includes $1 billion in savings across fiscal years 2019 and 2020, and $1.6 billion in savings on healthcare spending in fiscal year 2020, increasing to $1.9 billion in fiscal year 2021. Yet, notably the mayor did not dedicate additional resources to the city’s reserves, keeping them flat over last year -- they include $1 billion in the general reserve, $250 million in the capital stabilization reserve, and $4.5 billion in the Retiree Health Benefits Trust Fund. Budget watchdogs have repeatedly said that while the city has solid reserves, they are not enough, especially as de Blasio continues to increase spending, to truly weather a recession.

The mayor’s preliminary budget includes few major new investments in programs, and continues funding for those that are already underway or have been announced by the mayor in the last few months. Those include $25 million for NYC Care, which will give healthcare access to uninsured New Yorkers. The program is expected to launch in the Bronx this summer and will expand citywide by 2021 at a cost of $100 million annually, serving 600,000 people. The city also plans in next fiscal year to spend $106 million to continue funding Fair Fares (half-priced MetroCards for low-income New Yorkers); $5.3 million to speed up Crisis Intervention Training for NYPD officers; $25 million to expand 3-K for All in the Bronx and Brooklyn; and $2.7 million to increase bus speeds by 25 percent by the end of next year.

Also, for the first time ever, the city’s preliminary ten-year capital strategy reached triple digits, for a high of $104.1 billion, an increase of 8.7 percent. The city’s expense and capital budgets are calculating and presented separately. Every two years the capital strategy is re-established.  

“You’ve all heard the truism that budgets are a statement of values. That’s gonna play out in these coming months,” de Blasio said. “If we get continued good news from Washington, from Albany, from our broader economic context, we’ll have more freedom. If we get bad news, we’ll be ready to make some very tough decisions.”

In the next few weeks, the mayor’s budget proposal will be dissected in a series of City Council hearings, where officials from the administration will be called to testify. On Thursday, the Council acknowledged the city’s difficult fiscal position but indicated that it was ready for tough negotiations.

“We know there are challenges presented by the economy, as well as funding shortfalls from the state, particularly in education and social services. We will work with the Administration to get our fair share from Albany,” said Council Speaker Corey Johnson, finance committee chair Daniel Dromm, and capital budget chair Vanessa Gibson, in a joint statement. “But even while recognizing the challenges, we also know this City’s economy is strong and we will fight for a fiscally responsible plan that protects the social safety net.” They vowed to push for funding for Fair Fares, education, immigrant families, and permanent housing for those who need it. “These are our values and we will never walk away from them.”

Comptroller Scott Stringer also took note of the “warning signs” for the economy and commended the mayor for instituting a PEG, which he has called for repeatedly. “It’s past time for City agencies to seriously evaluate how effective their spending really is in achieving results for New Yorkers,” he said.

Year after year, fiscal watchdogs and rating agencies have praised the city’s responsible budgeting but have also raised alarms about spending trends that could backfire in an economic crunch. Andrew Rein, president of the nonprofit Citizens Budget Commission, reiterated some of those concerns on Thursday, noting that the budget showed “modest restraint” in increased spending.

“Much bolder action is needed to ensure the City is prepared for an economic downturn,” Rein said. “Spending growth should be limited to inflation and reserves should be increased. The PEG announced today should be developed with an eye to making operations more efficient and generating recurring savings.”

Last week, CBC recommended that the city pursue a four-part strategy of lower spending growth, greater reserves, improvements to the capital plan and strengthening the fiscal health of three major public authorities -- the New York City Housing Authority, NYC Health + Hospitals, and the Metropolitan Transportation Authority.

The mayor said his budget did not include any new funding for the MTA, funding for which is expected to be a major source of contention between de Blasio and Cuomo over the next several months.

A state budget is due by April 1, at which time the mayor and City Council will have significantly more information to work toward their next spending plan, which is due by July 1.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note - This article has been updated with a statement from a state Division of Budget spokesperson. 

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Citing Causes for Concern & Promising Cuts, De Blasio Presents Still-Growing Budget Plan of $92.2 Billion Thu, 07 Feb 2019 05:00:00 +0000
Historic New York Voting Reforms Must Be Funded, and Followed by More Changes to Improve Our Democracy http://www.gothamgazette.com/130-opinion/8257-historic-new-york-voting-reforms-must-be-funded-and-followed-by-more-changes-to-improve-our-democracy http://www.gothamgazette.com/130-opinion/8257-historic-new-york-voting-reforms-must-be-funded-and-followed-by-more-changes-to-improve-our-democracy gov cuomo votes

(photo: Kevin P. Coughlin/Office of the Governor)


On January 14, the New York State Assembly and Senate made their mark on New York voting history. After over 100 years without meaningful reform, legislators passed six bills that will significantly increase voter access to the polls and the reach of their voices. On January 25, Governor Cuomo codified this historic expansion and signed those bills into law. Important legislative priorities such as early voting, pre-registration of 16- and 17-year-olds, registration portability, and the consolidation of our state and federal primaries are now state law. Our legislators also took a significant step toward changing our constitution to allow for same-day registration and no-excuse absentee voting by mail.

It is important to note amidst the celebration of grassroots and advocacy groups who have been fighting for these reforms that our work, and the work of our representatives, is not complete. Transformative reforms such as automatic voter registration, the restoration of the voting rights for people on parole, establishing a universal right to vote, and shortening the deadline to change party affiliation were starkly absent from the legislation passed. Many of these common sense reforms are long overdue.

Our elected representatives have received well-deserved praise for taking decisive action in the process of bringing New York’s voting laws into the 21st century by prioritizing and passing legislation that was stymied for far too long. However, not only is there more to do, but New York is once again faced with the unfortunate and unnecessary lack of transparency that has become synonymous with state government in Albany.

Voting reform has the exciting potential to bring more people into the democratic process. But New York will not be a leader in democracy until the process of governing embodies openness, accountability, and greater participation. Reform must not stop with the passage of the aforementioned voting legislation, but requires inclusion of the once-honored legislative processes of hearings, debate, and public comment. Our elected representatives, as they consider and take further action, should seek out the voices of their constituents.

New Senate Majority Leader Andrea Stewart-Cousins says their work is not done, and so we too must continue to work and hold our representatives accountable until no one is left behind and New York is the embodiment of a democracy we can all be proud of.

As the chief executive of New York State, and the keeper of the state budget, Governor Cuomo is now tasked with implementation and ensuring new reforms are appropriately funded. It is concerning that his proposed executive budget lacks specific funding allocated for early voting. Just last year, Cuomo, in the face of intransigence and hostility in the state Senate, allocated $7 million for early voting in the executive budget. When this year provided with passed legislation to sign and implement, why would the governor not designate funding specifically for early voting in his budget?  

Cuomo states that the cost of early voting will be covered by the consolidation of the federal and state primaries combined with the new sales tax revenue to be collected from the elimination of the internet tax advantage. Neither of these revenue streams will be available to county Boards of Elections in time to fund early voting in 2019. It is puzzling why now, at this historic moment, the governor would withhold designated funding for a reform he supports and for which he allocated money only a year ago.

During his “First 100 Days” speech given in December, Cuomo criticized the federal government's attempts to disenfranchise voters, and stated that "we have to do the exact opposite and improve our democracy.” The reality is that to improve our democracy after over a century of inaction, it is going to take money. And to prove a commitment to the reforms being passed by the Legislature, the same reforms he himself has called for throughout his tenure, the governor must commit real dollars for implementation this year.

The governor and the leadership of the Assembly and Senate must stand true to their promises and ensure these reforms are appropriately implemented and adequately funded. Now is the time for clear, decisive action. It is not the time for unfunded promises, backroom deals, or excuses. Do not give us reform in name only. There must be a line item in the budget to specifically and sufficiently fund early voting.

All interested parties should work together to make sure the counties are provided with funding and support so that they are prepared for these changes and voters can take advantage of them seamlessly. Voting reform advocates statewide will continue to fight so that we the people can access our most fundamental right to vote. We believe in our elected representatives and we know they can get this done.

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Nicole Hunt is on the executive committee of Brooklyn Voters Alliance, a grassroots group dedicated to strengthening democracy in New York State. On Twitter @msnicolemh @bkvoters.

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

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Historic New York Voting Reforms Must Be Funded, and Followed by More Changes to Improve Our Democracy Thu, 07 Feb 2019 05:00:00 +0000
10 Burning Questions After Cuomo’s State of the State and Budget http://www.gothamgazette.com/state/8242-10-burning-questions-after-cuomo-s-state-of-the-state-and-budget-2 http://www.gothamgazette.com/state/8242-10-burning-questions-after-cuomo-s-state-of-the-state-and-budget-2 cuomo legistlation pro

Gov. Cuomo with Lt. Gov. Hochul & legislative leaders (photo: Mike Groll/Governor's Office)


Governor Andrew Cuomo, a third-term Democrat, delivered his State of the State speech earlier this month, laying out his proposed $175.2 billion executive budget for the 2020 state fiscal year that begins April 1. Calling it his “justice agenda,” Cuomo unveiled a long list of proposals, some new and many rehashed, expressing confidence that full Democratic control of the state Legislature would allow for a slew of sweeping policy victories that had been denied by years of Republican obstruction in the upper chamber. In the two weeks since then, the Assembly and Senate have indeed advanced several bills -- some of which the governor has quickly signed -- to reform the state’s voting laws, protections for the LGBTQ community, reproductive health rights, and criminal justice system.

The budget gap for next fiscal year, which begins April 1, is about $3.1 billion, lower than the one the state had to cover last year. Cuomo has proposed a 3.6 percent increase in spending each for healthcare and education, the two largest buckets in the budget. Under Cuomo’s plan, which will now be the subject of negotiations with the Legislature, the health care budget would increase by about $700 million, reaching $19.6 billion, and education spending would increase by $1 billion, for a total of $27.7 billion. The governor has also proposed a new education funding formula that he calls “Education Equity,” which would redistribute funds to the poorest schools in the poorest districts, he says, and will be a central element of budget discussions.

[READ: 15 Notable Cuomo Proposals Not In His State of the State Speech]

There’s a great deal to be hashed out, both in terms of policy and the state budget, in the next three months, including stakeholders beyond the governor and legislators, such as advocates, service-providers, local officials like Mayor Bill de Blasio, and others. Though the governor finds himself largely allied with the Legislature on broad progressive priorities, there are areas of disagreement, small and large, and details to be worked out on a host of complicated policies.

Now that Cuomo has framed the discussion with his policy and budget plans, the Legislature is fast at work passing bills and others around the state are pushing their agendas, here are ten of the outstanding questions for the upcoming Legislative session and budget:

1. Will the state stick to a 2% cap in spending increases?
Cuomo is fond of touting his administration’s fiscal discipline and his self-imposed 2 percent cap on increased spending each year. But it’s become a tradition for him to use maneuvers that move spending off the state budget to help mask the actual uptick in spending.

“One of the things that we noticed was that the governor again purports that this keeps state spending at 2 percent,” said Dave Friedfel, director of state studies at Citizens Budget Commission, a nonpartisan watchdog, said of the governor’s executive budget plan, “and it looks like it’s closer to 3 percent. It’s probably a touch more, based on some quick adjustments that we could see right away where money was moved out of state operating spending in a budget year but not in the current year for the calculation.”

2. Will the state put away more money in reserves?
The state would have just $2.3 billion in rainy day funds based on Cuomo’s budget, a pittance compared to the $175 billion in planned spending and an amount that would be insufficient for the state to survive an economic downturn if one should occur without major spending cuts and/or tax increases. The state, and the country at large, is reaching the tail end of the second-longest economic expansion in history and most experts say it will not last too much longer.

“The tide will turn eventually,” Friedfel said. “It’s a matter of how severe that recession is going to be. So we were hoping to see more deposits to the state’s rainy day funds.” Friedfel praised the governor’s proposal to put $500 million more into reserves over the current and upcoming fiscal years but said it wouldn’t be strong enough. “In the absolute best case scenario, [based on] the last three recessions, you could expect to see a revenue shortfall of $20 billion over four years and right now the state’s rainy day fund, even with the governor’s deposit is gonna have $2.3 billion,” he said.

Experts like Friedfel have pointed to California, a similarly high-tax and high-spending state, as a model to follow since that state has put away nearly 10 percent of its operating budget into reserves -- the California rainy day fund is expected to reach $15.3 billion by next year.

3. What will congestion pricing look like?
Cuomo has embraced congestion pricing -- tolling traffic into the Manhattan business district south of 60th Street -- as a crucial method to fund the MTA (and help reduce traffic). At his State of the State, he said the proposal could bring in as much as $15 billion over ten years. But he gave few details of what he believes the program should look like and his budget similarly does not outline exact tolls or methodology.

For elected officials in New York City and its suburbs, congestion pricing is far from a settled idea (there is also concern upstate about transportation funding). New York City Mayor Bill de Blasio has repeatedly emphasized that he would prefer a millionaire’s tax to fund the MTA, and has hemmed and hawed about an ideal congestion pricing plan, while lawmakers in outer boroughs have raised concerns that the program will hurt the pockets of their constituents. However, support for congestion pricing has grown significantly over the last few years, and Cuomo appears committed to passing some version of the program.

Still, there are many questions to answer as a scheme is crafted.

“But I think the bigger question too is, the city runs the roads and bridges that will generate this revenue, so how much of the money will go back to maintaining these roads and bridges?,” said Nicole Gelinas, senior fellow at the Manhattan Institute, a think tank. “That’s something the city really has a stake in. You wouldn’t want to see the city having to pay hundreds of millions of dollars to rehabilitate these bridges every few decades and then they’re generating money that only goes to the MTA.”

The governor's proposal, as Gelinas pointed out in a column for the New York Post, would give the Triborough Bridge and Tunnel Authority, which falls under the MTA, the ability to take over city streets, sidewalks, roads, bridges and tunnels to build the infrastructure to implement congestion pricing. In effect, it would put city infrastructure under the control of the state which could potentially, Gelinas warned, use that power to demolish bike lanes and pedestrian-friendly spaces and create more space for cars. "This would be a huge deal even if the state were offering something in return: a bigger say over how the MTA spends our money," she wrote. "Instead, Cuomo has said that he’d like more control over the MTA. More money from the city — and more dominance over its future."  

4. Will the governor and Legislature force New York City to split MTA costs with the state?
The governor has suggested that any shortfalls in capital funding for the MTA, after congestion pricing revenues are accounted for, should be split 50-50 between the city and state. He dubiously argued in his speech, as he has before, that he doesn’t control the MTA and that the city is legally responsible for funding subway and bus system capital needs. “And it is worth splitting the cost with New York City, to make the investment we should've made for decades to keep that transportation system vital,” he said, indicating that he could leave it entirely to the city.

Mayor de Blasio disagreed with the governor’s contention, and pushed back against his suggestion that the city had funded the majority of capital plans in past decades. But the mayor may have no choice in the matter if the governor and Legislature force his hand through law, as they did last year in compelling the city to fund half of the $836 million Subway Action Plan put into motion to arrest the rapid decline of subway service over the last few years.   

“On the MTA, it’s going to be very difficult negotiations to start off from here,” said Gelinas of the Manhattan Institute. “It’s hard to see the city going along with having to pay a much bigger portion of the MTA capital budget without having some kind of greater say in what happens at the MTA. The governor seems to want to go in the opposite direction with giving the state a bigger say, although it’s not really clear.”

In the weeks since the speech, Cuomo has repeatedly criticized the very management that he has appointed at the MTA while arguing that it should be restructured to give him more control, though he effectively already has near-absolute power over it.

“I think it’s a little disturbing that he would tie the rest of the existing [2015-2019] capital plan money for the MTA to all of this reform because that’s money that was already promised,” Gelinas added. “They’re already bidding out contracts based on that money. If you’re gonna say that $7.3 billion won’t be available unless we completely restructure the MTA, not only then do you have to worry about the future capital budget but now he’s sort of creating a big hole in the current MTA capital budget...It would be really hard to conceive of an MTA where the city, the suburbs, they’re still providing this money...but they don’t have say over the major capital projects that the MTA embarks on.”

5. What will Cuomo’s new education funding formula look like?
Cuomo proposed $1 billion in increased education funding overall, about $1.1 billion less than what the state Board of Regents recommended. In a series of slides during his speech, Cuomo pointed to education funding disparities across the state stemming from the current “Foundation Aid” formula, also known as Fair Student Funding, and how local districts distribute it to their schools, insisting that more money was being funnelled to richer schools in the poorest districts. His argument formed the basis for his “Education Equity” proposal, which would require school districts to dedicate a significant amount of foundation aid money to the poorest schools.

De Blasio was among those to quickly critique the governor’s proposal, insisting that in New York City at least, funding had been sent where it was needed, despite figures Cuomo had for the first time presented during his speech. The mayor, and education advocates and elected officials, have repeatedly urged Cuomo to fully fund the state Court of Appeals’ Campaign for Fiscal Equity (CFE) decision that first led to the creation of foundation aid -- a decision Cuomo insists is no longer relevant, with a commitment he says has already been met -- which would require billions more in funding, which Cuomo has refused to provide.

Rather, the governor’s budget briefing book took pains to argue that CFE has no relation to foundation aid. But he did not outline what his new proposal would entail, instead leaving it up to the state Department of Education to hammer out a plan.

6. Will Cuomo leverage mayoral control of city schools to get concessions from de Blasio?
Cuomo’s budget book noted his support for extending mayoral control of New York CIty schools by three years, a position he has taken in the past as well. But in the past, the governor -- and Republicans who controlled the state Senate earlier -- used mayoral control as a form of leverage over de Blasio, who is more closely allied with Assembly Speaker Carl Heastie and the teachers unions, attempting to enact concessions including an expansion of a charter school cap.

Cuomo did not mention charter schools in his speech and his budget briefing book has only a small section dedicated to them, but he has been friendly to the sector in the past, and charter school donors have been generous to his campaigns. It’s not clear yet whether Cuomo will pursue increasing the statutory cap, which is close to being reached, especially since Republicans who favor the charter sector no longer have clout in Albany. There are some Democratic legislators who are supportive of charters, but it is unclear how loud those voices will be in their conferences, and whether Cuomo will put any political capital into another expansion of charters’ ability to grow.

And if it isn’t charter schools, it’s unclear what, if anything, Cuomo may try to trade for extending mayoral control.

7. What will marijuana regulation look like?
This is one particularly burning question that has more answers than the others. Cuomo proposed a regulated program to legalize adult recreational marijuana use and raise $300 million in revenue annually, though it allows counties and municipalities to opt out. His budget puts forward the Cannabis Regulation and Taxation Act, which would impose three taxes on the cultivation and sale of marijuana for recreational use. He has also insisted that regulation must be accompanied by decriminalization for those already convicted on marijuana-related arrests and set a legal use age of 21.

But as legislators negotiate what Cuomo has outlined, questions remain about where the marijuana revenue will go and what the new regulation will look like in practice, particularly for businesses, among other details to be decided. The governor is a more recent convert to the cause of legalization and he has heeded the advice of advocates and other elected officials who have long supported legalization and have insisted it should come with benefits for the communities that have been most adversely impacted by marijuana enforcement.

“Now we just have to put it in place, and we have to do it in a way that creates an economic opportunity for poor communities and people who paid the price, and not for rich corporations that are going to come in to make a buck,” Cuomo said in his speech.

New York City is expected to comprise a majority of the state’s marijuana market and de Blasio, who was until recently opposed to legalization himself, also warned against the “corporate takeover of the marijuana industry.” Speaking at a news conference in Albany after the governor’s speech, he said, “[T]his should be a community-based form of business, a small business focus, and a focus on those who are economically harmed by the previous policies.”

8. Will Cuomo’s ‘Green New Deal’ have legislative backing?
Cuomo proposed a “Green New Deal” to increase New York State’s investment in renewable energy and reach 100 percent clean energy by 2040. It was a sweeping declaration from the governor, who has long faced criticism from activists that his environmental record has not been strong enough. At the same time, Cuomo failed to mention the Climate and Community Protection Act, a bill that seeks to accomplish similar goals but has not moved in the state Legislature, though it may this year.

It’s unclear what compromise might look like, or whether the Legislature will force Cuomo’s hand -- the proposals have differing timelines for achieving certain milestones, among other differences, and advocates say the governor’s ideas don’t go far enough. With legislative action, the proposed environmental regulations would also have the strength of law rather than being enacted administratively and being vulnerable to cuts in the future. Senator Todd Kaminsky has indicated that he will continue to pursue the CCPA, potentially setting up a clash between the governor and lawmakers.

9. Will the Legislature advance the New York Health Act for single-payer health care?
While running for reelection, the governor was ardent that he supports a single-payer health care program, the likes of which would be established by the proposed New York Health Act -- but he has repeatedly said it should be mandated and funded by the federal government rather than the state. New York would have to increase overall state government revenue by $139 billion by 2022 to pay for the program, according to a RAND Corporation study. It would provide health coverage to all New Yorkers -- they wouldn’t have to purchase insurance or receive it from employers -- and patients would not have to pay deductibles, co-payments or out-of-pocket costs. The study estimates that total health care spending in this case would be similar to what current levels are expected to be in 2022, and would be about 3 percent lower by 3031, “with the ten-year cumulative net savings being about $80 billion, or 2 percent.”

The bill -- which its sponsors say will be altered in a new version soon to be introduced -- has passed the Assembly but not the Senate, though both houses are now under Democratic control. Still, legislative leaders have not listed the New York Health Act as a top priority for this year. Several Democratic state lawmakers successfully flipped seats last year on platforms that included support for the New York Health Act, and some legislators, especially the lead sponsors, Assemblymember Richard Gottfried and Senator Gustavo Rivera, are expected to continue pursuing it, which could create a significant fissure both within the Legislature and with the governor’s office.

“It was clear in the country and New York that healthcare was the number one issue on voters’ minds,” Gottfried, chair of the Assembly Health Committee, said in an interview with Gotham Gazette right after the November election. “A solid majority of the new state Senate has either been a cosigner, voted for it in the Assembly, or campaigned on it. So I think we’re on track to get it passed in the Assembly and state Senate.”

10. Will the Legislature fully close the LLC loophole and pass stronger ethics reforms and a public campaign finance system?
The state Legislature passed several ethics and campaign finance reforms within the first few days of the new session, including severely limiting donations that can be made by Limited Liability Companies and requiring increased disclosure of the ownership of those firms. But that measure did not completely close the so-called ‘LLC loophole,’ which has allowed untold amounts of money to flow into state elections from moneyed interests and has drawn the ire of good government advocacy groups.

Cuomo, the biggest beneficiary of LLC donations of any elected official in the state, has said he wants to close the loophole entirely, a pledge he reiterated at his State of the State while also calling for a ban on corporate contributions to political candidate campaigns -- under the new law passed by the Legislature, LLCs, like corporations, can donate a maximum of $5,000. The Legislature is expected to take up further campaign finance reforms as well, which could mean that LLC and corporate donations may soon become a thing of the past, while a state public campaign finance system could be put into motion.

Cuomo has also proposed a broader agenda of reform that includes curtailing contribution limits across the board, a proposal that could meet with some resistance, and expanding the state’s Freedom of Information Law to cover the Legislature, to which lawmakers have been strictly opposed, among a variety of other reform measures.

[READ: Cuomo's 2019 Agenda of Election, Campaign Finance and Government Ethics Reforms]

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

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10 Burning Questions After Cuomo’s State of the State and Budget Wed, 30 Jan 2019 05:00:00 +0000
9 Key Takeaways for New York City from Cuomo's State of the State and Budget http://www.gothamgazette.com/city/8217-9-key-takeaways-for-new-york-city-from-cuomo-s-state-of-the-state-and-budget http://www.gothamgazette.com/city/8217-9-key-takeaways-for-new-york-city-from-cuomo-s-state-of-the-state-and-budget govcuomo jus

Mayor de Blasio applauds Governor Cuomo (photo via the Governor's office)


Governor Andrew Cuomo’s State of the State speech and accompanying $175.2 billion state budget proposal for fiscal year 2020 had something for everything. The 354-page policy book lays out proposals, big and small, on everything from criminal justice reform, transit and infrastructure funding, workforce protections to rent regulations, voting and ethics reform, farmer benefits, legalizing marijuana, women’s rights and reproductive health, LGBTQ protections, and environmental regulation, to name just a few.

The budget proposal, with its long list of policy priorities, has several measures that will have significant consequences for New York City and its own budget, the first draft of which Mayor Bill de Blasio will soon present. The state fiscal year begins April 1, the city’s begins July 1. Citizens Budget Commission, a nonpartisan fiscal watchdog, noted in its assessment that the governor’s budget proposal cuts nearly $100 million in reimbursements and aid to the city.

And while some of the governor’s initiatives may benefit the city or line up with de Blasio’s priorities, there are others that could end up being a burden and might prompt staunch opposition from the mayor and state legislators who represent districts in the five boroughs. De Blasio expressed concern about a few proposals in the hours after the governor’s presentation, while conceding that “there's a lot to like in the speech.” Below are eight key takeaways for the city from Cuomo’s policy and budget plans.

Cuomo wants the city to split MTA costs with the state. De Blasio disagrees.
Cuomo has embraced congestion pricing as a key proposal to garner resources for the MTA and stem the tide of years of disinvestment that have left large funding obligations and a crumbling subway system. While he has still not fully fleshed out a congestion pricing plan, Cuomo estimated such a system could bring in about $15 billion in revenue over a ten-year period, but also insisted that any shortfall to fund the subways and buses over and above that should be split 50-50 between the city and the state. He argued that over several MTA capital plans the city’s contributions to the MTA have been falling and the state’s contributions have been rising, a characterization that de Blasio later took issue with.

Cuomo, who effectively controls the MTA and appoints a plurality of its board members and its leadership, is proposing an overhaul of the agency’s management, which he has blamed for repeated failures over the years and again in his speech. “It was purposefully designed so that everyone can point fingers at everybody else, and nobody's responsible,” he said, even though he has claimed credit for its successes in the past and he has recently re-exerted control relative to the L-train shutdown.

The details of Cuomo’s MTA management reform plan are also still not fully clear.

De Blasio has repeatedly said the best solution to the MTA’s financial woes is a millionaire’s tax, an idea that is anathema to Cuomo. In his Albany news conference shortly after the governor’s speech, the mayor reiterated the proposal as he pushed back against the governor’s suggestions. “Now, there’s a lot of good ideas on the table and here's a chance to decide which combination of those ideas will actually solve the problem,” he said of funding the MTA. “But yet you can't take it out of the city budget, it’s not going to work.” Though he continues to say he prefers the millionaire’s tax, de Blasio’s rhetoric around congestion pricing has warmed considerably.

Reforms needed to close Rikers Island may soon be reality
The governor’s budget proposal includes support for several criminal justice reforms which de Blasio has said are crucial to the plan to close the Rikers Island jail complex within 10 years. Among those are ending cash bail, among other reforms to pretrial detention processes, and passing Kalief’s Law, a speedy trial reform named for Kalief Browder, the Bronx youth who spent three years on Rikers Island on charges of stealing a backpack. Never convicted, Browder was released but later died by suicide, which was attributed to his harsh treatment while in detention.

De Blasio has said that bail and speedy trial reform would work in concert with ongoing efforts to reduce the population of Rikers down below 5,000, the threshold the city estimates it would need to reach in order to house detainees in borough-based facilities that are being planned. The city jail population is now under 8,000, de Blasio announced during his State of the City address.

Rent regulations will help de Blasio’s affordable housing plan
De Blasio’s ambitious plan to create and preserve 300,000 units of affordable housing by 2026 is on track according to city estimates and broke a record in 2018 by financing 34,160 affordable units, the most in one year for any administration. That plan could benefit massively from a push by the governor and the Legislature to strengthen rent regulations, which are set to expire at the end of June.

Cuomo has expressed support for ending vacancy decontrol whereby upon certain vacancies landlords can remove units from the regulated rolls, eliminating preferential rent limits, and reforming the process by which landlords can assess tenants for improvements to buildings and apartments. All are items that de Blasio praised while noting that he would have to see more details. Such regulations would have been “inconceivable” when Republicans controlled the state Senate, he said as he anticipated seeing stronger laws in place this year. “It's going to help us preserve affordable housing in New York City,” de Blasio said. “And certainly from what the governor said in the speech, I'm encouraged.

Education and mayoral control
Cuomo proposed a 3.6 percent increase in education funding statewide -- an increase of $1 billion from the current year for a total of $27.7 billion -- and proposed a new school funding formula called “Education Equity,” emphasizing that current funding is not flowing to the poorest schools in poorer school districts.

The governor presented new data based on his administration’s analysis of numbers provided to the state by large schools districts that had been required by a law passed last year meant to assess exactly how districts are allocating education funds. Cuomo showed data that indicated all the largest school districts are funding their wealthier schools at higher rates than their poorer schools, though de Blasio questioned the presentation and said the city would have more to say soon. It’s not immediately clear how Cuomo’s administration calculated its numbers.

Cuomo’s proposal looks like it would set up a fight with the mayor, who insisted that the governor should fully fund the “Foundation Aid” formula as required by the Campaign for Fiscal Equity court decision, which Cuomo has argued is settled and a relic of the past.

De Blasio did praise the governor for proposing a three-year extension of mayoral control of city schools, which Cuomo has done in the past though he has appeared comfortable settling on multiple one-year extensions (last time it was two years) as a means of frustrating the mayor. “[U]nder a mayoral control model that we have in New York City for the last five years, we have consistently moved resources to schools in greater need,” de Blasio said, noting that Cuomo’s presentation “did not reflect the reality we know in New York City” and promising to correct the record.

Notably, Cuomo has not initially indicated a plan to raise the cap on charter schools in New York City, a statutory limit that will soon be hit. Cuomo has been a staunch supporter of charters (and de Blasio has mostly been an opponent), but he has been relatively quiet on the issue as he has moved left over the last few years and repaired his relationship with the teachers unions. Still, Cuomo has made sure that charters have secured key protections in state agreements, though this year could hold a different approach.

Speed cameras and bus lane cameras
Last year, a limited speed camera program around schools in New York City lapsed amid legislative intransigence led by state Senate Republicans but was revived through an agreement among the governor, mayor, and New York City Council. Cuomo has proposed reinstating the program in state law through 2022, expanding the number of camera zones from 140 to 290, as well as removing a cap on bus lane cameras and allowing automated cameras to enforce “block-the-box” violations in the proposed congestion pricing zone. The bill would also create a new camera program to combat violations in Manhattan that contribute to congestion.

Infrastructure program highlights include JFK, LaGuardia Airports
Cuomo touted an additional planned $150 billion investment in infrastructure in his third term, building on projects that are already underway and several new ones that he is expected to launch. Among those are the renovations of LaGuardia Airport, the new JFK Airport, four new Metro North stations in the Bronx, an expansion of the Javits Convention Center, and the opening of the Shirley Chisholm State Park in Brooklyn.

Anti-terror initiatives
New York City continues to be one of the most prominent terror targets in the world and Cuomo offered several measures to improve security and preparedness, including legislation to ban gun bump stocks, prohibit weaponized drones, and regulations on the sale of certain explosives.

Two measures were directly impelled by incidents in New York City -- the governor proposed a bill to require two pieces of identification to rent a vehicle, citing attacks carried out across the world and particularly the 2017 Halloween attack on the West Side Highway that claimed the lives of eight people. Cuomo also proposed investments in “infrastructure hardening” such as traffic bollards and crash barriers to protect civilians.

Lead exposure thresholds
Cuomo proposed lowering the threshold of blood lead levels that would lead to an immediate public health response, which could potentially become a prominent issue in New York City where residents of the New York City Housing Authority have been fighting with the administration for years over lead paint in their apartments.

Other policies apply to New York City
A variety of other policies the governor is backing would apply to New York City and have an impact in the five boroughs, including some measures that have already passed the Legislature, like voting reforms, a ban on gay conversion therapy, and the Gender Expression Non-Discrimination Act. This list also includes the planned expansion of abortion rights, more gun control, the Child Victims Act to address child sex abuse, and the Dream Act to provide state tuition assistance to undocumented immigrants and their children, among other policies. Also in this category is the expected legalization of recreational marijuana for adults 21 years of age and older.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

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9 Key Takeaways for New York City from Cuomo's State of the State and Budget Mon, 21 Jan 2019 05:00:00 +0000
15 Notable Cuomo Proposals Not In His State of the State Speech http://www.gothamgazette.com/state/8213-15-notable-cuomo-proposals-not-in-his-state-of-the-state-speech http://www.gothamgazette.com/state/8213-15-notable-cuomo-proposals-not-in-his-state-of-the-state-speech 32881220978 1373afdcc8 z

Gov. Cuomo (photo via the Governor's office)


In his expansive State of the State speech on Tuesday, Governor Andrew Cuomo articulated wide-ranging priorities for the legislative session and the budget for the 2020 fiscal year that is due April 1. But there was plenty left unsaid in the 80-minute speech, included instead in the detailed policy book and budget documents released along with the governor’s address. Some of those proposals could have broad social and economic consequences for the state should they come to pass, with many likely to move forward as Democrats control the entire State Legislature.

But the governor has also been known to include proposals in past policy books and budgets without putting any political capital behind them once negotiations with the Legislature are underway. Below is a list of notable Cuomo proposals that didn’t make it into the governor’s speech:

Increasing protections against harassment in the workplace
Though the governor has touted passing last year the strongest laws in the nation against sexual harassment in the workplace, he did not mention them at all during his State of the State speech. Nonetheless, his plans do include proposals to expand the protections passed last year, including by lowering what some have called onerous standards for proving harassment under the Human Rights Law, mandating that non-disclosure agreements articulate a victim’s right to file a complaint or participate in an investigation, and requiring workplaces to prominently display sexual harassment informational posters.

The governor and legislators have been under pressure from advocates and some lawmakers to hold public hearings on sexual harassment in both the public and private sector -- hearings that were not held before last year’s laws were passed -- and to strengthen the new laws. While Cuomo included enhanced laws in his proposals, legislative leaders announced a joint hearing for February 13.

Cuomo is also proposing removal of the statute of limitations for reporting rape.

Pursuing universal access to health care
The governor will establish a commission comprised of the Department of Health, Department of Financial Services, health care and insurance experts to explore how the state can provide universal access to health care in the state. The commission would have to issue a report by December 1.

Cuomo has dismissed calls from legislators and advocates to support creation of a single-payer health care system in New York, but outlined several health care proposals in his speech and included the commission in his written plans.

Criminal penalties for assaulting the press
Taking direct aim at President Donald Trump’s repeated attacks on the free press, including calling journalists the “enemy of the people,” and accusations of “fake news” against reporters, Cuomo, who has had his own issues with the press, is proposing legislation that would make it a felony to assault a journalist while they are doing their job. Journalists would join several other classes of worker, such as nurses, in this category.

Creating a database of economic development deals
Cuomo’s budget proposes several reforms to state contracting processes, which have been at the center of recent corruption scandals that have marred his administration. Among those reforms is an online database of economic development projects that receive state assistance. Good government advocates have repeatedly called for that “database of deals” to provide more accountability for state spending and the Legislature has in the past promised to pass such legislation even if the governor did not support it.

It’s unclear if the database the governor has in mind will meet the expectations of those who have demanded such a public accounting, which would ideally show investments and their results in granular detail.

Protecting undocumented immigrants from deportation
The governor backed the “One Day to Save New Yorkers” bill, a small but significant change to sentencing for Class A misdemeanors. The bill would reduce the maximum punishment for such offenses from 365 days -- exactly one year -- to 364, in an effort to protect undocumented immigrants who, if convicted of crimes with a sentence of one year or more, could face deportation proceedings.

A permanent watchdog over police-involved killings
Cuomo signed an executive order in 2015 giving the state Attorney General the authority of a  special prosecutor to investigate instances where unarmed civilians are killed by law enforcement officers. His budget proposal includes support for legislation to codify that order by creating a permanent special counsel to probe such incidents, something he has backed in the past.

Additionally, Cuomo’s budget would require all law enforcement agencies across the state to implement a use-of-force policy and to collect and report all data on incidents where the use of force leads to death or injury.

Tackling lead exposure among children
The governor has proposed lowering the threshold of blood lead levels in children that would trigger intervention by public health officials. The proposal could be particularly significant for New York City, where the city’s public housing authority (NYCHA) has been sued in federal court for failing to deal with lead paint in its apartments (and covering up missed inspections) while Mayor Bill de Blasio has repeatedly downplayed the number of children exposed to lead.

Creating a new agency to help domestic violence survivors
The budget proposes creating a new state agency called the Division of Victim Prevention and Response, by consolidating the Office for the Prevention of Domestic Violence, the Office of Victim Services, and the Office of Campus Safety.

The governor is also proposing legislation to modernize policies for providing relief to domestic violence survivors -- no longer requiring them to pay certain costs for staying in a domestic violence shelter and removing the requirement that they must apply for public assistance. He is also creating a task force to study the state’s service delivery system for survivors. Cuomo is also pushing the Domestic Violence Survivors Justice Act, which would expand certain protections for survivors caught up in the criminal justice system.

Protecting breastfeeding mothers from workplace discrimination
The governor intends to propose legislation that would clearly establish lactation as a pregnancy-related condition covered by the state’s Human Rights Law. It would ensure that employers provide reasonable accommodations for breastfeeding women (i.e. to pump) or be liable under the law.  

Expanding protections against wage theft
In his “first 100 days” agenda, Cuomo spoke about passing new protections for the freelance and gig economy but made no reference to it on Tuesday and his policy book only mentions it sparingly, in its introductory section. What the document does include is a proposal to expand criminal penalties for wage theft, a crime of which freelancers and gig workers often find themselves the victims. The budget proposes changing the state’s labor law and establishing an expanded range of violations, from misdemeanors to felonies, for wage theft. It would also give the state Department of Labor the authority to refer cases for criminal prosecution.

Protecting sex trafficking victims
The budget commits to closing loopholes in the state’s rape shield laws, which are meant to protect victims of sexual violence by limiting evidence of their sexual history from being introduced in court. Cuomo’s budget proposes expanding the law to cover sex trafficking victims and to prevent prostitution convictions from being used against victims.

Establishing compassionate release
Cuomo’s budget proposes introducing legislation to establish a compassionate release process for incarcerated individuals above the age of 55 suffering from debilitating health issues. The bill would allow these individuals to be considered for medical parole after serving half their sentence.

Promoting corporate diversity and pay equity
Cuomo’s budget creates a Task Force on Representation and Corporate Transparency, to devise ways the state can promote diversity on corporate boards and in their workforce and to ensure pay equity. Cuomo will also order a study -- by the Department of State, Department of Labor and the Division of Human Rights -- of the gender and racial composition and inequity of boards of firms that have state contracts.

Encouraging youth participation and engagement
The policy book proposes creating a Youth Council made up of 62 young people, one from each county in the state, between the ages of 13 and 21. The council is meant to operate for two years, meeting at least three times a year, to inform the state government’s policies on education, the environment, civic engagement, and juvenile justice. It would also include subcommittees dedicated to discussing sexual harassment and assault, female empowerment, and cyberbullying.

Extending the millionaire’s tax and closing the carried interest loophole
The state’s millionaire’s tax is slated to expire at the end of 2019 and so far its fate has remained somewhat uncertain, though Cuomo announced his intention to renew it during a December policy speech. The governor’s policy book proposals includes a five-year extension of the tax to retain the $4.4 billion that it is estimated to bring to the state coffers each year from roughly 60,000 taxpayers, half of whom are from out of state.

The governor is also proposing to do away with the “carried interest” loophole. Hedge fund managers, private equity investors, and venture capitalists earn a portion of their income in the form of carried interest, which is taxed at a lower rate than regular income, costing the state about $100 million, according to state estimates. Cuomo has proposed a change in how this income is treated, and would impose a 17 percent “fairness fee” to raise about $1.1 billion annually.

[Read: Cuomo's 2019 Agenda of Election, Campaign Finance and Government Ethics Reforms]

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

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15 Notable Cuomo Proposals Not In His State of the State Speech Thu, 17 Jan 2019 05:00:00 +0000
What's The [Data] Point? $175.2 Billion, Cuomo's Executive Budget http://www.gothamgazette.com/state/8211-what-s-the-data-point-175-2-billion-cuomo-s-executive-budget http://www.gothamgazette.com/state/8211-what-s-the-data-point-175-2-billion-cuomo-s-executive-budget whats the data point


What's The [Data] Point? Episode 62 -- $175.2 Billion, Cuomo's Executive Budget, with Andrew Rein of CBC [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

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$175.2 billion is the size of Governor Andrew Cuomo's Executive Budget plan for Fiscal Year 2020, unveiled earlier this week and now the basis for hearings and negotiations with the Legislature.

The New York budget is one of the largest government budgets in the world, and it’s poised to grow 4 percent over this year’s budget for fiscal year 2019. The Governor has included proposals for everything from congestion pricing to recreation marijuana and sports gambling legalization. Of particular note are significant spending increases on priorities such as education that are backed by a five-year extension of the income tax surcharge on millionaires. Andrew Rein, new president of Citizens Budget Commission, joined the hosts to give an initial assessment of the Governor's budget plan.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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What's The [Data] Point? $175.2 Billion, Cuomo's Executive Budget Thu, 17 Jan 2019 05:00:00 +0000
Promising Sweeping Change, Cuomo Outlines State of the State Policy Agenda and $175 Billion Budget Plan http://www.gothamgazette.com/state/8202-promising-sweeping-change-cuomo-outlines-state-of-the-state-policy-agenda-and-175-billion-budget-plan http://www.gothamgazette.com/state/8202-promising-sweeping-change-cuomo-outlines-state-of-the-state-policy-agenda-and-175-billion-budget-plan cuomo sotos ja

(photo via the Governor's office)


Governor Andrew Cuomo, a Democrat starting his third term, laid out an ambitious social, economic, and racial “justice agenda” at his State of the State speech on Tuesday as he also presented a $175.2 billion executive budget proposal for the 2020 state fiscal year that begins April 1.

Speaking at the Hart Theater in Albany, Cuomo celebrated full Democratic control of the State Legislature for the first time in his tenure and promised quick movement on a raft of legislation within the first 100 days of the new legislative session, which began last week. “We’re off with a bang,” Cuomo mused, as he began his roughly 80-minute speech by playing a video of the Tuesday morning demolition of the old Tappan Zee bridge. Indeed, the returning Democratic majority in the Assembly and new majority in the Senate have already begun passing bills long-stalled in what had been the Republican-led upper chamber, including several voting reforms and protections for LGBT New Yorkers -- all legislation Cuomo is expected to soon sign.

Cuomo had already articulated much of his State of the State policy agenda in the previous weeks, but added new elements both in his speech and the accompanying policy book, while also reviewing what he sees as his top accomplishments and connecting policy plans to his budget outline. He also repeatedly took issue with federal policies, such as tax reforms he said are causing crises in the state, and sought to juxtapose New York with the Trump administration on issues like immigration.

With both the Assembly and Senate under the party’s control, Cuomo and the Legislature are in a position to advance sweeping progressive bills and a budget that would make significant shifts in everything from education and health care to elections, women’s rights, the criminal justice system, environmental and rent regulations, mass transit, and labor protections, to name a few. The governor outlined policies from ending the use of cash bail to legalizing recreational adult use of marijuana to a “Green New Deal” for New York that increases investments in renewable energy. He also outlined sweeping campaign finance and government ethics reform plans, some of which may set up clashes with the Legislature, and made a surprise announcement that he and Comptroller Tom DiNapoli had come to an agreement about contract pre-review that the governor had previously resisted.

As he has done since running for reelection, and most forcefully in his inaugural speech on Ellis Island on New Year’s Day, Cuomo presented New York as a countervailing force to the federal government under President Donald Trump and as a vanguard for progressive policies in the nation. Though he has dismissed rumors that he harbors greater ambitions for 2020, the speech could easily sketch the outline of a presidential campaign.

“We face real challenges in the state of New York,” Cuomo said. “We have a federal government that is assaulting our values, our liberties, our rights and our economy.”

Cuomo noted that the state would have to fill a budget gap of $3.1 billion, even as he boasted of his record on fiscal management, reduction in taxes to their lowest in decades, and positive credit ratings for the state. But he warned of slowing revenues, blaming the 2017 federal tax code overhaul that reduced the State and Local Tax (SALT) deduction that New York taxpayers can claim. While pointing to an increased overall tax burden for many New Yorkers, especially those who pay high property taxes, Cuomo pitched proposals to reduce taxes on the middle-class at a cost of $1.8 billion and to permanently cap property tax increases at 2 percent annually (everywhere outside New York City), something the state has done annually for several years.

On both education and health care funding, which comprise the two largest chunks of the state budget, Cuomo proposed a 3.6 percent increase. He proposed a total education budget of $27.7 billion, an increase of $1 billion, and floated a new funding method called the “Education Equity” formula, to ensure that state aid to poorer districts is distributed equitably to poorer schools, rather than what he depicted as the lopsided distribution under the current ‘Foundation Aid’ formula that does not dictate where money goes within districts. Education funding may also form the basis for disagreement with the Legislature, both houses of which are likely to push for more than a $1 billion increase in overall state funding to localities.

Health care spending would increase to $19.6 billion, up from $18.9 billion, though the governor also warned of federal cuts, including $2.5 billion to Disproportionate Share Hospital (DSH) payments and $1 billion to cost-share reduction payments, besides the perennial threat from Republicans seeking to undermine the Affordable Care Act.

A leader who wants to be known as a builder, and one who can get large projects completed, Cuomo touted his successful infrastructure projects and those that will come to completion in the next few years. At the same time, he took no ownership of the crisis at the Metropolitan Transportation Authority (MTA), seeking, as he has done in the past, to deflect blame for the crumbling subway system and the mismanaged agency where he appoints the largest share of board members and its leadership. Cuomo proposed overhauling the agency to clarify who controls it, though he already does, in effect, but did not offer specifics. He also reiterated a push for a congestion pricing proposal that he said could bring in $15 billion for the agency (apparently over a ten-year window, though details have not been released), far short of its estimated needs, and insisted that any other need should be split evenly between the city and state, setting up another battle with Mayor Bill de Blasio.

Cuomo proposed a broad agenda of women’s rights protections, including codifying the protections of Roe v. Wade by amending the state constitution, passing the Reproductive Health Act and the Comprehensive Contraception Coverage Act. He also said he would enact the Equal Rights Amendment, outlaw revenge pornography, eliminate the statute of limitations for rape, modernize the pay equity law and take efforts to reduce maternal mortality rates and the related racial disparities.

Touting the state’s passage of strong gun protections in his first term -- Cuomo mentioned he was speaking on the sixth anniversary of passage of his signature SAFE Act legislation -- the governor pushed for enacting new regulations including a “red flag” bill, expanding the waiting period for background checks, and banning bump stocks, all of which appear likely to sail through the Legislature.

The governor also put forth his version of a Green New Deal, which would move the state towards 100 percent clean energy by 2040. He said he would create a new Climate Action Council to reduce the state’s carbon footprint, establish a $70 million property tax compensation fund to incentivize localities to close obsolete power plants and transition to clean energy, and announced several investments in clean water infrastructure and expanding environmental protection efforts.

Cuomo called for the passage of several other bills that languished for years when Republicans controlled the Senate, including the Jose Peralta Dream Act (renamed for the state Senator who passed away last year and had championed it), the Child Victims Act, and reformed rent regulations to protect tenants and the state’s affordable housing stock.

He also reiterated a call for a criminal justice reform package that would eliminate cash bail and enact speedy trial reform and discovery reform. In further outlining his support for legalizing the recreational use of marijuana for adults, Cuomo said it is expected to bring in about $300 million in annual tax revenue for the state, though the governor’s proposal would allow municipalities to opt out of allowing marijuana stores. He insisted that legalization would have to go hand-in-hand with decriminalization, pushing for automatically sealing certain marijuana-related criminal records, and investment in communities.

“Let's stop the disproportionate impact on communities of color," he said. “Let's create an industry that empowers the poor communities that paid the price and not the rich corporations that come in to make a profit.”

Toward the end of his speech, Cuomo again performed the annual ritual of discussing the need for building public trust in government and preventing the repeated scandals that have rocked the state, including his administration and many legislators. The governor outlined a host of proposals -- many repeated from past years, several new -- meant to ensure greater transparency in government and prevent public corruption.

He unveiled a “Lobbying Code of Conduct” which would lower the threshold for financial disclosure of lobbying, expand the period of time that legislators and policy-makers in state government are banned from lobbying after they leave their positions, and require increased conflicts of interest disclosures by lobbyists. If the Legislature refuses to take up the idea, Cuomo said he would unilaterally prohibit any lobbyists that do not voluntarily follow the code from lobbying the executive branch. Additionally, he proposed a number of campaign finance reforms -- banning corporate contributions, establishing a public campaign financing program, reducing contribution limits, and completely closing the LLC loophole (with expressed intention for further action, the state Legislature passed bills on Monday to severely limit contributions from LLCs but it remains open to exploitation).

Cuomo also announced a proposal to expand the Freedom of Information Law to cover the state Legislature, an idea that has been around for decades but rejected by legislators, and the state procurement reforms on which he reached an agreement with Comptroller DiNapoli.

In a news conference in Albany after the governor’s speech, Mayor de Blasio broadly praised the platform that Cuomo set out to achieve. In particular, he was encouraged that Cuomo separately proposed extending mayoral control of New York City schools, set to expire in June, by three years. In previous years when it was due to expire, the governor had also suggested a three-year extension but he and Republicans in the Senate had used mayoral control as leverage to extract concessions from the city. There may still be some appetite in both branches for pushing de Blasio on his leadership of city schools.

The mayor did strike a note of caution about a few items. He insisted on the need for a long-term funding stream for the MTA -- he has been hesitant to fully embrace congestion pricing and has instead said a millionaire’s tax would be the best solution -- and said Cuomo’s portrayal of the history of the agency’s funding -- that the state has stepped in to fund it in recent years while the city has been reducing its contributions -- “simply wasn’t accurate.” As he has indicated in the past, he disagreed that the city should bear half the costs of funding shortfalls in MTA needs. He also pushed back against the governor’s critique of the city’s school funding formula, insisting that the city has consistently sent money to the schools that need it most.

De Blasio promised he would have more to say as he and his team review Cuomo’s proposals in fine print, and offer their own rebuttals to Cuomo’s depiction of MTA and school funding.

The governor’s speech now sets the stage for negotiations with the Legislature, which will soon issue its own budget priorities. However, it appears that the pace of action in Albany will be far different from past years where almost every significant legislative action was lumped into a big budget agreement right around the April 1 deadline. Legislators have already shown they plan to pass legislation and send it to Cuomo to sign.

And for the first time this year, there will no longer be the infamous “three men in a room” negotiating the spending plan for the next year, as Senator Andrea Stewart-Cousins, the first female leader of a legislative chamber, will join the governor and Assembly Speaker Carl Heastie in hashing out policy and budget deals as those negotiations are needed.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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Promising Sweeping Change, Cuomo Outlines State of the State Policy Agenda and $175 Billion Budget Plan Tue, 15 Jan 2019 05:00:00 +0000
Agenda 2019: City & State Budgets on Mostly Solid Ground, with Major Questions Looming http://www.gothamgazette.com/state/8147-agenda-2019-city-state-budgets-on-mostly-solid-ground-with-major-questions-looming http://www.gothamgazette.com/state/8147-agenda-2019-city-state-budgets-on-mostly-solid-ground-with-major-questions-looming Cuomo budget presentation

Gov. Cuomo (photo: The Governor's Office)


This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

New York’s economy has seen several rosy years in the decade since the Great Recession, with a run of steady growth, increasing job numbers, rising wages, and reliable tax revenue that has defied historical trends -- and led to growing city and state government budgets. But 2019 may be the peak of that economic swing as economic experts predict a long-expected slowdown to set in before 2020. New York City, the experts say, seems better equipped to weather any adverse effects of slowing growth and the state may struggle, presenting some hard choices for Democrats who will fully control state government come January and have a long list of priorities, some of which have financial costs attached.

Also complicating the fiscal pictures as the state and city levels are projected budget gaps that must be closed, looming negotiations over how to fund the next MTA capital budget plan and its tens of billions of dollars to fix the subways, and the still unclear effects of recent federal tax reforms, among other outstanding questions. The finances of New York City continue to show a rosier picture than those of the state, with the city economy essential to the state’s ability to spend more each year, though the state has grown its budget in much more limited fashion than the city under Mayor Bill de Blasio.

In January, Governor Andrew Cuomo will present his State of the State address and executive budget for the fiscal year that begins April 1. Afterward, de Blasio will respond to the governor’s budget plan -- which will set the stage for negotiations with the state Legislature, de Blasio, and others -- and release his own preliminary budget for the next city fiscal year, which will begin July 1. Once the state budget is finalized, the city will be able to take its details -- funding levels, new mandates, and more -- into account as it creates its own budget. The specifics of the annual struggle over what the state is asking or requiring of the city are to be seen, though Cuomo has already indicated he plans to seek more money for the MTA from de Blasio.

Budgets are statements of values as much as they are financial planning documents and Cuomo and de Blasio, both Democrats, face pressure each year to balance their policy priorities with fiscal restraint, as well as the demands of others, especially members of the respective legislative bodies each must negotiate with. The governor prides himself on having passed eight on-time or nearly on-time budgets with a 2 percent cap on increased spending, though he is known to manipulate the numbers to say he has stuck to that limit even though some years he has not. De Blasio boasts of record amounts of savings, though watchdogs regularly say that he is not socking away enough given the extended economic boom while he is spending too much, especially in recurring costs like through a significant expansion of the city workforce.

The agreed upon state budget was more than $168 billion for the current 2019 fiscal year, with savings that are far too minimal according to every expert. And the mayor’s administration, though praised by fiscal monitors for its responsible financial planning, has overseen ballooning expenditures, passing a nearly $90 billion budget for fiscal 2019 -- it was $72.7 in the final year of the Bloomberg administration.

But New York City revenue is largely based on property taxes, which would remain relatively stable even in the event of an economic slowdown. The state on the other hand is far more vulnerable since personal income tax and sales tax contribute a bulk to state revenue.

Barring any unforeseen circumstances, the current economic expansion, the second-longest in the country’s history, will continue through most of 2019, bolstered by the federal tax cuts passed in 2017 (even if many New Yorkers’ tax burdens increase due to the new cap on state and local deductibles). It should allow both the state and the city to keep spending, though experts warn that both should prepare for what will happen down the line. Both the Cuomo and de Blasio administrations, along with the state Legislature and City Council, respectively, should be putting more money towards rainy day funds, fiscal experts say; particularly the state, especially as necessary infrastructure investments loom large and add to already rising debt obligations.

New York State
The state budget remains far more precariously placed in the case of a downturn, even though one isn’t expected to hit soon. The governor has reiterated in recent months that he will continue to abide by a self-imposed 2 percent limit on increased annual expenditures, which presents little wiggle room to add major spending initiatives, though it remains to be seen if the governor will employ one of his many budget maneuvers to obscure actual spending increases. For instance, the State Fiscal Year 2019 budget, which began April 1, included a provision that funnels Payroll Mobility Tax revenue directly to the MTA instead of going through the state, effectively shifting $1.5 billion out of the budget.

“Part of the problem is they’ve technically abided by it but they’ve only done that by shifting things around and reclassifying things, not necessarily through stringent cost controls,” said David Friedfel, director of state studies at Citizens Budget Commission, a nonprofit watchdog. “The more they play those tricks, the harder they will be to find in the future if that’s how they choose to close the gap.”

The New York State Division of Budget’s mid-year financial update, released in November, predicted that the state will meet its revenue projections by the end of the fiscal year. Even at the state level, budget gaps remain manageable, at about $3.1 billion for fiscal year 2020, a number that is quickly cut if the 2 percent growth is factored in.

State Comptroller Tom DiNapoli released his own financial update in November, estimating that overall tax revenues would decrease by 1.8 percent by the end of the state’s 2019 fiscal year (end of March). Though personal income tax revenues are expected to fall by 2.5 percent, business and consumption taxes are set to increase by a total of 6.5 percent, the report estimated. Tax revenues are expected to increase by 5.9 in the 2020 fiscal year and then at a lower rate, 2.4 percent in the 2021 fiscal year.

Similar to city representatives, officials in DiNapoli’s office said in a background briefing that they expect a soft landing for the economy, despite the volatility in national and international markets. They have yet to determine the full impacts of the federal tax code overhaul, which capped State and Local Tax (SALT) deductions at $10,000 annually, raising concerns that high earners facing larger tax bills would in some cases fold to out-migration pressures, leaving the state and taking their tax dollars with them. Given New York’s position as a high-tax state, even many upper middle class homeowners in expensive New York City suburbs, and in the city itself, will be facing increased tax burdens, though it is not immediately clear that these factors will lead to a significant increase in the number of higher earners leaving the state. New York has consistently seen out-migration each year and has lost a net of 1 million residents since 2010, according to The Empire Center, a think tank. A report issued by the center in March suggested that the state should undertake several reforms to encourage the economic competitiveness which could help reverse that trend.

The state took measures to decouple state tax provisions from the federal tax code, including decoupling from the SALT limit to prevent higher state taxes, and changes to the child tax credit and the single filer deduction. The state also created two new programs -- the Employer Compensation Expense Program and the State Charitable Gifts Trust Fund -- in an effort to limit state taxpayers’ exposure to federal tax changes, but neither program appears to have caught on in any significant way. Officials in the state comptroller’s office said the impacts of the SALT deduction in particular wouldn’t be evident until during next fiscal year, particularly if it encourages people to move out of state.

Other risks in federal funding to the state seen in recent years -- Republican proposals to repeal the Affordable Care Act and make drastic cuts to Medicaid -- have also mitigated, the officials said, since those proposals have failed to come to fruition. But federal funding does remain uncertain as Congress is in the middle of negotiating the current federal budget with President Donald Trump, who has threatened a government shutdown if Congress does not approve funding for a wall along the southern border that he had promised Mexico would pay for. The ballooning federal deficit incurred from the Trump-led tax cuts have also increased pressure on federal spending, which could trickle down to the aid that New York receives for transportation, health care, and education, among other things.

“The state is in decent financial position but not when you consider the fact that we are nine years or so into an economic expansion,” CBC’s Friedfel said. “The state has been gifted with $12 billion in financial settlements and some additional revenues yet the state’s reserves are not where they should be or could be. They haven’t been added to in about four years. And liabilities are still out there.”

As Friedfel noted, the state’s rainy day funds stand at only about $2 billion, a pittance when looked at in the context of a downturn. In the case of a recession, Friedfel estimated, the state could face up to $50 billion in combined losses over a four-year period. “California is doing a very good job on their reserves. They’re gonna have close to 10 percent of state operating spending in their reserves, which is really what New York should be aiming for,” he said. “Instead of $2 billion, we should be closer to $10 billion.”

As with the city, the state’s debt also continues to rise, particularly with the governor having launched an ambitious infrastructure program that includes modernizing existing facilities and building new ones across the state, including bridges, airports and bus systems. The state’s debt service payments for fiscal year 2019 stood at $5.5 billion and are projected to rise to $6.6 billion in 2020. New York currently ranks second-highest in the country, behind California, in outstanding debt.

Year after year, DiNapoli has waved a red flag over the state’s debt obligations and officials in his office are keeping a close eye on whether those will increase in the upcoming year. There will be particularly pressing needs -- the MTA, NYCHA -- where the state will have to work with the city to fund large capital improvements. The current 2015-2019 MTA capital plan remains underfunded and the Fast Forward Plan, proposed by New York City Transit President Andy Byford to modernize the city’s subway and bus systems, may cost nearly $40 billion, with no plan proposed to pay for it in its entirety. A congestion pricing program for New York City has been embraced by the governor and many in the state Legislature as a funding stream, but even if implemented quickly and without carve-outs it would fall far short of meeting the goal.

“That’s one of the biggest questions,” said Gelinas from the Manhattan Institute, “especially if the economy continues to do well. How much does Governor Cuomo go after the city for MTA funding and in multiple billions of dollars...and does that cut into the city’s other priorities?”

IBO’s Lowenstein also echoed that concern. “The state has a great deal of leverage over the city and its own fiscal concerns and it would be unreasonable to expect these issues get resolved without city participation.”

Last time Cuomo and de Blasio negotiated the MTA capital plan, the governor successfully convinced the mayor to significantly increase city funds for the authority. Cuomo has repeatedly stated publicly in recent months that he will be pushing the city to pay “its fair share” for the MTA. De Blasio has called for an added tax on high-earners to provide dedicated funding for the MTA, a proposal that Cuomo has publicly mocked as fantasy on several occasions.

The state Legislature next year will also include several newly-elected Democrats who expressed support for increased education funding, per the Campaign for Fiscal Equity decision, which could add billions to the state budget. The state Board of Regents recently proposed a $2.1 billion increase in education funding for next year, which would be a significant jump from the current fiscal year’s increase.

New York already spends nearly twice the national average on per-pupil funding, said CBC’s Friedfel, but doesn’t necessarily allocate funding to the districts that need it most. CBC has argued for changing the key formula, known as Foundation Aid, noting that many wealthy districts receive it despite already spending more than the national average and more than the already-high state average by leveraging local tax dollars.

Another open question is what the state will do with about $900 million in unspent or unallocated one-time funds from Extraordinary Monetary Settlements, recovered from the financial industry in the wake of the 2008-09 market crash. Since state fiscal year 2015, the state has received nearly $11.2 billion in those settlements.

Though the governor has repeatedly said he will divert those funds to capital investments, and he mostly has, he has also used them for budget balancing purposes, DiNapoli’s office noted.

“The governor should be putting much more money of any one-time revenue sources aside for the MTA, things like court settlements or just better-than-expected revenues,” Gelinas said, noting the dire need to fund the transit agency. “We haven’t put enough of that money aside for the MTA.” Cuomo has, on the other hand, dedicated financial settlement money to his signature infrastructure projects, like the new Mario M. Cuomo Bridge.

Unlikely to impact the next state budget, but certainly on the negotiating table in the new legislative year, is the push to revolutionize how New York provides health insurance and health care. Several legislators, long-time and newly elected, are pushing for the New York Health Act, which would establish a single-payer health care system in the state and could cost nearly $140 billion in additional state expenditure by 2022, according to a RAND Corporation study. Though the act could reduce total health care spending by 3 percent by 2031, the study found. Cuomo has said he supports a single-payer system, but has insisted that it should be implemented by the federal government rather than the state, and said that he does not see it make fiscal sense for New York.

New York already has one of the largest Medicaid programs in the country, comprising a huge chunk of the state budget (education and Medicaid are the two biggest spending programs). But enrollment has been relatively flat over the last three years. If that trend continues, Friedfel said, the state could find more savings in the budget.

Friedfel also noted at least one development on the horizon that could have a significant impact on state tax revenue. “The million pound gorilla in the room is what’s gonna happen with the state’s millionaire’s tax,” Friedfel said. The tax is due to expire on December 31, 2019, and though prominent elected officials have called for extending, and even expanding, the program, CBC’s position is that it should be allowed to sunset to help with the state’s economic competitiveness and to keep high-earners from leaving because of the SALT deduction cap.

While Cuomo has overseen its repeated extension and he has dismissed calls to expand it, during the recent election cycle he was mum about what he wants to do with the current millionaire’s tax.

New York City
The city released its latest budget modification in November, revising spending up by $1.4 billion, for a total of $90.56 billion for the 2019 fiscal year, which ends June 30. That marks a high point for city spending, and an $18 billion increase from before de Blasio came to power in 2014. The city’s Office of Management and Budget projects a manageable $3.17 billion budget gap -- the difference between expected revenues and projected expenditures -- for the 2020 fiscal year starting July 1. OMB expects that gap to rise to $3.36 billion for fiscal year 2022, the end of the current four-year financial plan period, by when expenditures are projected to reach a whopping $99.6 billion.

As City Comptroller Scott Stringer noted in his latest financial report released on Friday, OMB tends to issue more conservative estimates of revenues in upcoming years, allowing the administration more leeway to adjust spending. Stringer’s report estimates the budget gap to be lower, about $2.6 billion in FY2019 and $2.8 billion in FY2022.  

“We’ve come out of a run of a number of years of good economic conditions and good fiscal conditions here in the city...but we’re not seeing anything in the numbers that suggests it’s going to end anytime soon,” said Ronnie Lowenstein, director of the Independent Budget Office, a nonpartisan city-funded agency.

In a background briefing, an official at Comptroller Stringer’s office acknowledged that there’s significant uncertainty, with even the Federal Reserve appearing divided about where the economy is heading. There are mixed signals in the market -- unemployment is markedly low which should lead to higher inflation, but hasn’t.

But the comptroller’s office is cautiously optimistic and no economist currently projects a recession -- though one is never out of the question -- but rather a return to a slower rate of growth by the time 2020 rolls around.

“[We’re] expecting a great deal more softness in economic growth,” said IBO’s Lowenstein. “Not a recession but a much softer U.S. economy. And as far as the local economy’s concerned, we’ve already begun to see the weakening.” She pointed to the drop in job growth over the last few months and also noted that though the job market has diversified with more jobs created outside the financial industry than before the last recession, most of the new jobs have been in lower-paying industries.

But she said that slower growth won’t create out-of-control deficits. “We’re looking at gaps that are readily manageable, of the size that we’ve managed in the past,” she said.

The official from the comptroller’s office agreed that the city has the capacity to manage outyear budget gaps, particularly with a strong budget surplus each year that has allowed the city to maintain a healthy, if not optimal, level of reserves. The de Blasio administration put away added rainy day funds in the current fiscal year, responding to demands from the City Council. The result included a total of $1.25 billion in the general reserve, $4.35 billion in the Retiree Health Benefits Trust Fund, and $250 million in the capital stabilization reserve.

The city’s budget cushion has been increasing over the years and stood at about 11.2 percent at the start of the current fiscal year, though the comptroller has urged the administration to maintain levels between 12 and 18 percent, the lower range of which would have required more than $6.3 billion to hit the upper end.

agenda19v2 aThere are of course various risks that the city must manage. One big vulnerability, according to the official from the comptroller’s office, is the size of the city’s workforce, which has added more than 30,000 workers under de Blasio.

“If you look at the November budget update...the biggest issue is the increased expected spending on labor,” said Nicole Gelinas, senior fellow at the Manhattan Institute, a think tank. She noted that the report increased the labor reserve for fiscal year 2020 by $704 million, for 2021 by nearly $1 billion and for 2022 by about $1.4 billion.

“It just shows that these labor agreements that the mayor is making with the unions are costing a little bit more money than expected,” she said. “So the basic story is if the economy keeps doing well, we can probably squeak by with balancing next year’s budget...but if the economy does fall into a recession, with the higher labor costs making these deficits a little bit bigger over the next few years, they would pose a bigger problem for the city.”

Gelinas said the city must take aggressive cost-cutting measures in labor agreements, particularly health care spending, to help avert layoffs and service cuts in the case of a recession. “Longterm, health care savings have to be much more aggressive,” she said. “The healthcare fringe benefit budget for the upcoming fiscal year will be almost $11.5 billion and it’s continuing to rise. It’s going to $12.5 billion by the end of the financial plan.”

“No mayor has ever gotten through two terms without a recession,” she added on the eve of de Blasio’s sixth year in office.

The city’s debt obligations have also been rising, owing to a massive capital program, which pays for building and maintaining the city’s infrastructure such as roads, parks, schools, and libraries.

“Debt service is one of the two big sources of growth in city spending,” said IBO’s Lowenstein, referring to the annual debt payments that are included in the city’s expense budget. “It’s debt service and healthcare, and they’re both big and they’re both growing very fast.” Debt service -- which is accounted for in the city’s annual operating budget -- is budgeted at a total of $6.8 billion for fiscal year 2019, according to the November update, and is expected to rise to $8.3 billion by fiscal year 2022.

Unlike most other municipalities, New York City’s capital program is funded entirely through borrowing, incurring massive debt that must necessarily be paid off every year, which could pose problems in the long run. “It’s less that we can’t continue to pay the debt service on the commitments that we’ve made but rather that they’re crowding out other things that the city might want to do,” Lowenstein said. “And our ability to expand those capital commitments is not unlimited. Especially in an era when interest rates are rising.”

Rising debt service also gives the mayor and City Council “less leeway to budget for other things ranging from teachers to cops to road repair,” she said.

Stringer has repeatedly raised the issue of rising debt, though it’s not yet out of control. The rule of thumb for his office is that debt service should not exceed 15 percent of tax revenues, a level it is well below currently. And the City Council has also attempted to make changes to the mismanaged capital funding process, creating a new subcommittee this year dedicated to examining the capital budget, finding ways to make it more efficient and reducing cost overruns. Upcoming City Council budget hearings may indicate whether that subcommittee and its focus are having any real impact.

But there are big items that may add significantly to the city’s capital investments and therefore create an additional debt burden. Those include funding for the beleaguered New York City Housing Authority (NYCHA) and the state-run Metropolitan Transportation Authority (MTA). In both cases, the city may have no choice but to commit billions more dollars, particularly pending the outcome of negotiations with federal officials over NYCHA and with state officials over the MTA, for which the city typically kicks in significant capital funds.

“The city may not have choices so the speed with which this occurs may be out of our hands,” Lowenstein said.

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note - This article has been updated to ntoe that the Capital Stabilization Reserve is $250 million, not $250 billion. 

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Agenda 2019: City & State Budgets on Mostly Solid Ground, with Major Questions Looming Sun, 16 Dec 2018 05:00:00 +0000