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Max Politics Podcast: The Push for Housing Development in New York, with Basha Gerhards of REBNY


Housing on the board (photo: Michael Appleton/Mayoral Photography Office)


May 11, 2023 - Max Politics Podcast: The Push for Housing Development in New York, with Basha Gerhards of REBNY

Basha Gerhards, senior vice president of planning at REBNY, joined the show to discuss housing policy at the city and state levels, disappointment in the recent state budget agreement, and more.

Listen to the conversation and let us know what you think, on Twitter @TweetBenMax. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts at Max Politics.

Read more: Max Politics Podcast: The Push for Housing Development in New York, with Basha Gerhards of REBNY

Hochul Gambled On A Late Budget; Did It Pay Off?


Gov. Hochul meets with legislative leaders (photo: @GovKathyHochul)


The dust is beginning to settle on the $229 billion New York state budget, which was approved last week after a month of delay that saw Governor Kathy Hochul and the State Legislature make major compromises on spending and policy measures.

Hochul has expressed no regret for delaying the budget for the second time in two years, after she managed to convince the Legislature to support her top priority and change the state’s bail laws yet again. She won other priorities, too, but came up empty on her biggest proposal for the future of the state: an ambitious housing development plan.

Opinions in the Legislature have varied. Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins, both Democrats like Hochul, appeared frustrated by the governor's approach but have been celebrating the budget deal overall. Rank-and-file legislators have shown their disappointment at different aspects of the deal while touting accomplishments. For advocates and organizations pressing their own agendas, there were victories and defeats.

But for everyday New Yorkers, who pay far less attention to the inner workings of Albany, the state government kept chugging along, state workers kept being paid – though legislators were not – and there was little practical consequence from a budget that was delayed the longest in more than a decade.

This is Hochul’s second budget, and the second time she has delayed it to force changes to state bail laws. Hochul’s predecessor, Andrew Cuomo, proudly boasted of passing successive on-time or timely budgets, with just a few days of delay in some cases. Previous administrations in Albany, on the other hand, were notorious for late budgets, with some passing months after the April 1 start of the new fiscal year.

In announcing a “conceptual budget agreement,” Hochul said she was more concerned about getting the right budget rather than an on-time budget. “There's a blueprint for the future of New York, and I know this budget process has taken a little extra time, but our commitment to the future of New York was driving this,” she said, “and I believe today we'll be able to unveil the concepts of a framework that'll reveal that what was important is not a race to a deadline, but a race to the right results.”

The state constitution gives the Governor far more power and leverage than the Legislature in setting the terms of the budget process, and the delay served Hochul well in some regards. She managed to settle the thorny issue of revisiting bail, specifically giving judges more discretion by removing the “least restrictive standard” to ensure a defendant’s return to court. The changes, which were more expansive than what she had originally proposed and apply to low-level offenses as well, have prompted broad criticism from progressive Democrats and criminal justice reform advocates while Republicans have said they don’t go nearly far enough to ensure more pre-trial detention.

As bail negotiations took center stage and Hochul imposed her will to win changes, the governor’s “Housing Compact” suffered. The plan, which aimed to build 800,000 homes over the next decade to address the state’s crippling housing shortage, was her other major priority for the budget but was entirely scrapped as she failed to rally enough support from the Legislature or negotiate a compromise both sides could live with.

Hochul has conceded her initial failure while claiming she did not have enough time to build consensus around her plan. “So the fact that people are saying, 'Well, if you'd only taken the time to build support' – I didn't have time," Hochul told the Buffalo News in an interview on Monday. "But I also didn't want to miss the window to really start the conversation and say, 'We're talking about housing now.' So now I have a year to build consensus and support around a plan.”

Housing advocates naturally have been disappointed. “Albany’s failure to address the housing crisis in the State budget represents an unacceptable abdication of responsibility that will leave New Yorkers struggling,” said Annemarie Gray, executive director of Open New York, a pro-housing advocacy group, in a statement.

The governor did accomplish other items that had also received pushback, at least in part. The budget reauthorizes 14 “zombie” charter schools in New York City, though the governor had initially proposed eliminating the city’s charter school cap altogether. It also includes a financial rescue plan for the MTA that will draw $165 million for each of two years from New York City, lower than the $500 million annually in the governor’s proposal, while also increasing subway service and funding a free bus pilot in each of the five boroughs.

The budget increased massive education and health care spending, including a $1 billion mental health care plan, and included major climate action, an increase in the minimum wage, funding for expanded abortion access, emergency rental assistance funding for public housing tenants, and more.

Nonetheless, the late budget and lack of housing progress left lingering doubts about Hochul’s leadership and political instincts, and pointed to signs of a return to dysfunction in Albany despite one-party control.

“The way we’re set up structurally, constitutionally, it’s a three-pronged government, if you will, and at the end of the day, we’ve gotta get all three prongs in concurrence with each other,” said Assemblymember Crystal Peoples-Stokes, the Assembly majority leader and a Buffalo Democrat. “So it took longer than it has in the past, but we got it right."

To some observers, the delay in the budget didn’t seem justified. Andrew Rein, president of Citizens Budget Commission, a nonprofit fiscal watchdog, said in a statement that “this budget was not worth the wait.”

“Increasing the State’s fiscal instability risks New York’s attractiveness to residents and businesses and increases the chance of future massive program cuts or economically harmful tax increases. New York needs to be both affordable and stable; this budget does not take the steps needed to get there,” he said.

When the governor and Legislature passed a third budget extender instead of a final budget, State Republican Party Chair Ed Cox said, in part in a statement, “This failure of leadership clearly demonstrates that government by Three Democrats in the Room is not working for the people of New York State.”

“I think the major blow is to how New Yorkers view their own state government,” said Blair Horner, executive director of the New York Public Interest Research Group, a good government organization. He said the April 1 budget deadline is a “crude metric” but one of the few ways that average New Yorkers can gauge the performance of state government. “The law says they should have a budget in place for the new fiscal year, and when they don’t, that’s just another hit to the body politic.”

The late budget threw uncertainty far and wide, at least for the month. It forced Mayor Eric Adams to craft his $106.7 billion executive budget proposal for the city’s 2024 fiscal year, which begins July 1, without clarity on state funding the city would receive, to what extent certain Hochul-proposed cost-shifts would go through, and other key funding and policy details. The mayor’s executive budget was released April 26, just one day prior to the governor’s announcement of the conceptual budget agreement.

“Unfortunately, without an adopted State budget from Albany, the City is operating in the dark when it comes to the impacts of proposed assistance and potential cost shifts, and today’s Executive Budget reflects that uncertainty,” New York City Comptroller Brad Lander said in a statement responding to the mayor’s executive budget proposal.

Senator Liz Krueger, a Manhattan Democrat and the Senate finance committee chair who has been in office for two decades of state budgets, downplayed the ramifications of the month-long delay. “The fact is that because of the ability to do what's called extenders, when we are late on a budget, it has very little significant impact on anyone because we continue to pay the workers, we continue to pay our bills,” she said.

Krueger pushed back on the notion that the delayed budget reflects poorly on either the governor or the Legislature, insisting that it’s a matter of perception rather than reality. “I think we’re functioning on a much higher level of professionalism than in any other time that I've been here over 20 years,” she said, in apparent reference, at least in part, to the more collegial shift from Cuomo to Hochul.

She also insisted that local governments, including New York City, which is disproportionately affected, largely knew what to expect from the budget since it wasn’t appropriations but policy issues that held it up – though major funding streams such as for the MTA and money set aside for the asylum seekers crisis and charter school rent did remain uncertain and affected the city’s budgeting. “This budget was very heavily laden with policy, far more than any other I think I've ever dealt with,” she said. “And it was all those policy issues that took us much longer to negotiate out, which is different than all the other governments in New York State not knowing what the hell is happening with the money they might be expecting from us.”

In the Buffalo News interview, Hochul proudly said she was “guilty” of pushing a policy-heavy budget. “Yes, it has a lot of policy. This is the one time of year the governor has a chance to really have a major hand in driving policy,” she said, though she did not shy away from potentially pursuing a similar tactic in the future. “It is always easier just to do a budget by the numbers. That will always be the path of least resistance. But it will never be the path that I choose,” she added.

Some have explained away the delayed budget in part by noting that the governor released her own executive budget proposal two weeks later than is usual, which New York governors are allowed to do the first session after being elected to give them more time to formulate a budget. “The starting line moved back quite a bit, which shortened the process and made it a lot harder to get the budget done on time at all,” said Patrick Orecki, director of state studies at CBC. He also cited the turnover at the state Division of Budget, where acting director Sandra Beattie was fired and replaced at the end of February.

“If you need a little bit of extra time to get a good budget done, then it is worth taking that extra time,” Orecki conceded. But, the final deal did not vindicate that delay, he said. “Especially with the fact that housing, probably the key policy item in this budget in terms of impact on New Yorkers’ lives, is not going to be addressed at all. So it’s looking more and more like the extra time to work on the budget did not yield an extra good budget.”

As Orecki pointed out, Cuomo made it a priority to pass budgets on-time for better or worse, even if it meant that many major policies and spending measures were shoe-horned in at the last minute and approved with little debate or public scrutiny. Many aspects of this year’s budget were debated openly, though Hochul nonetheless issued “messages of necessity” so lawmakers could quickly pass budget bills without going through the otherwise-required three days of aging.

“A couple of more days would not have hurt,” State Senator Krueger said. “I’ve always been on record as not such a big believer in using emergency messages of necessity when it’s not an emergency…I think giving the public and the Legislature more time to review these final budgets would be good public policy. But I’m not Queen. I don't always get my way.”

While the budget extenders made sure that state employees received pay, “the most practical consequence is frankly on local governments rather than on state government itself, especially for the city of New York,” Orecki said. Other local governments and school districts were also going through their own budget processes without clarity about aid coming from the state.

The question also remains whether the decision to delay the budget actually strengthened the governor’s hand? “It could if the governor was willing to use the extenders as significant leverage against the Legislature,” Horner said. “The governor could do an 11-month extender… Now you do that and you’re at war with the Legislature.” Former Governor David Paterson used that maneuver successfully in 2010, as he added spending cuts and other budget measures to extenders to force the Legislature’s hand in approving the budget.

As Horner noted, drastic action could have threatened Hochul’s relationship with the legislative branch, where Democrats hold supermajorities in both chambers. “I think the only leverage is really if lawmakers believe that the governor is willing to go to the brink,” he said. Legislators weren’t getting paid as the budget was delayed, under the provisions of a 1998 state law, and some legislators have suggested that the law should apply to the governor as well.

Neal Kwatra, founder of Metropolitan Public Strategies, said the perception of dysfunction caused by the late budget is only readily apparent to Albany insiders and to the media, rather than a practical concern for Democratic leaders or voters. “Outside of our little bubble, I don't think a late budget really penetrates to the public writ large,” he said.

“I think this relationship between the Legislature and the governor is still in its early innings. They're still kind of building and figuring it out,” he added, alluding to the fact that Hochul has still only been governor for less than two years.

He also said that though the governor seemed to have notched another major loss in the failure of her housing agenda – following closely after her failed nomination of Hector LaSalle to be the state’s chief judge and an unexpectedly close reelection fight in November – the notion that her position has been weakened further is overblown. Kwatra pointed out, for instance, that the budget included a minimum wage hike and major climate action, successes that the governor can brag about.

“I think she's got three years ahead of her. The governor of New York has vast powers. She's still learning the job. And I think they're probably going to learn from this budget session,” he said. “I think it's going to be interesting to see what she and her team learn about the politics of what they just went through and how they maybe deepen some relationships and to figure out how to build other alliances.”

The deferred budget certainly truncates the post-budget legislative session, giving the Assembly and Senate far fewer days to discuss and negotiate their remaining legislative priorities. But Kwatra also had another prediction. “The Legislature was able to avoid anything on housing which, frankly, is also going to be avoided next year in an election year. So, at least for a couple of years, they've forestalled this debate, and frankly, given themselves in many cases, a much more comfortable path to reelection, avoiding primaries, avoiding tougher general elections.”

For Republicans, the budget delay was all the more frustrating since they were effectively shut out of the room where major decisions were made between Hochul, Stewart-Cousins and Heastie. “There's three people in a room, all of the same party,” said State Senator Tom O'Mara from the Southern Tier, ranking Republican member of the Senate finance committee, of the Democratic leadership.

“We're a month late when the budget was supposed to be done and we get nothing but by leaks and rumors about where things stand,” he said, the day the budget agreement was first announced. “It's important that the public, at a minimum, be aware of what's going on and us as the representatives need to know where things stand.”

Though O’Mara also said he would prefer a good budget over one that meets the deadline, he said it “doesn't bode well for building confidence of the public in their government and their legislature for being able to get things done.”

The day prior, the Republican conference called on the governor to avoid messages of necessity to pass the final budget, calls that went unheeded. “We have shown with all the extenders, even though we don't like them, state government has continued to operate, government services continue to be provided, and government employees continued to get paid,” he said. “And there's no reason we can't wait the constitutionally required three days to at least have that period of time for ourselves and for our constituents and the citizens of New York to be able to review the budget fully.”

O’Mara echoed concerns about what the delay will now mean for the remainder of the legislative calendar, forcing work to be expedited. “Typically I've always been frustrated with the process in Albany at the end of session because literally in the last week to 10 days, we do probably 65% of all the bills for the year,” he said. “And things are just getting rushed through at the last minute. Some things aren't even getting committee meetings, and they're just popping up on an active list on the floor.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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Fines for Hospitals that Don't Reactivate Psychiatric Beds Included in New State Budget


Hospital services (photo: Governor's Office)


Hospital leaders are "disappointed" to see the state budget include new penalties for hospitals that fail to reopen shuttered psychiatric beds as part of a $1.4 billion plan to beef up New York's mental health care infrastructure.

Hospitals around the state have been struggling to bring over 1,000 psychiatric beds back online after closing them during the height of the pandemic due to severe staffing shortages and lack of funding.

The $229 billion budget passed by Governor Kathy Hochul and the State Legislature last week included language sought by Hochul to allow the state to fine hospitals $2,000 per day for each psychiatric bed listed in their operating certificate that is not in service.

"It's fair to say we were disappointed to see the provision about civil penalties in the final budget," said Alison Burke, vice president of regulatory and professional affairs at Greater New York Hospital Association, which represents hundreds of hospitals in the northeast.

"But our hospitals are working very closely with the Office of Mental Health and there have been no fines issued because everybody is communicating," she added.

Hochul, a Democrat, has made opening the beds a priority since early in her tenure as governor, part of a renewed focus on the state's mental health crisis, particularly for those with untreated serious mental illness. The psychiatric beds, located in general hospitals, are meant for short-term treatment for people experiencing acute mental health crises, and often serve as an entry point into outpatient services or long-term institutionalization.

There are 5,780 inpatient psychiatric beds in use in general hospitals (known as "Article 28" facilities) and private clinics across the state, and another 3,300 long-term beds in state-run institutions.

Last year, Hochul pushed for $55 million in one-time state and federal funds to incentivize hospitals to restore psychiatric beds. That funding received federal approval in February and was paid retroactively to hospitals.

But by this spring, fewer than 450 beds had been restored – a result hospital administrators blame on greater capital needs and a statewide dearth in psychiatrists, nurses, and other mental health clinicians.

This year, Hochul turned from incentives to sanctions, seeking the ability to impose greater fines on delinquent hospitals.

The State Office of Mental Health (OMH) is in "active conversations with Article 28 hospitals on how best to achieve compliance" with their licensed capacity, wrote OMH spokesperson James Plastiras in an email.

No hospitals have been fined under the new penalties or a previous ultimatum issued by the Office of Mental Health and State Health Department threatening fines to hospitals with closed beds, according to Plastiras.

The governor was in Buffalo on Monday to tout the state's mental health spending plan as part of efforts to bolster the "continuum of mental health care."

"We also put in some tougher language," Hochul told reporters after her event of the effort to establish new psychiatric units, without explicitly mentioning the penalties.

"We put in strict language that said we're going to be monitoring this and we expect you to bring them back online," Hochul continued. "The problem is some hospitals spent money dismantling the security features" needed to open units in line with safety regulations, she said, referring to the mass conversion to COVID-19 medical beds.

New York's mental health care system came under greater scrutiny last week after Jordan Neely was strangled to death by Daniel Penny on a Manhattan subway. Neely was homeless and in apparent emotional crisis, with reports that he yelled about being hungry, thirsty, and "ready to die." Neely was in and out of hospitals and treatment programs in recent years and was known to outreach workers in the weeks before he was killed, according to news reports.

"There's long waits in hospital beds and people fall through the cracks. Sometimes they're visible, sometimes you see them," Hochul said at the Buffalo event, calling Neely's killing tragic.

"His death is clear evidence that we need support. We need alternatives for these individuals, so they're not relegated to that kind of life," she said.

Gaps in the availability of post-discharge services, residential treatment programs, and other outpatient options mean patients are often held in psychiatric beds for long stays, in some cases spilling into emergency departments for admittance. In many cases, patients are discharged with limited follow-up or program placement.

Mayor Eric Adams has also highlighted the importance of reopening psychiatric beds as part of the city's broader subway safety efforts, including a directive last fall to increase involuntary police removals of people in crisis. "This is what highlights what I’ve been saying throughout my administration,” Adams said in response to questions about Neely's killing on Thursday. “People who are dealing with mental health illness should get the help they need and not live on the train."

New York City Health + Hospitals, the city's public hospital system and largest inpatient behavioral health provider, has plans to reopen 200 psychiatric beds by the end of the year but faces severe full-time staff shortages. Spokespeople for Adams and Health + Hospitals did not provide comment on the new potential state penalties.

As part of the effort to restore psychiatric beds, Hochul secured $14 million in loan forgiveness for psychiatrists and other mental health clinicians, after calls from hospital administrators for aid. The funding represents an increase of $5 million from last year's budget and applies to a wider range of personnel. Hospitals, which have been struggling to find nurses and other technical and support staff, were "very happy" to see that expansion, said Burke of Greater New York Hospital Association.

The mental health budget also includes additional funding to expand long-term inpatient beds in state-run psychiatric institutions, and close to $200 million for outpatient and mobile treatment programs. Hochul and the Legislature also passed a 4% cost-of-living workforce pay increase, which will largely go to outpatient providers, according to Burke. That increase was less than the 8.5% some human services providers sought but more than the 2.5% Hochul included in her executive budget.

The bulk of the mental health care funding, $1.1 billion, will go to the construction and services of 3,500 supportive housing units for people with mental health needs. Another $30 million will go to school-based programs, and $60 million will support the 988 suicide and crisis hotline. And $42 million over two years will go towards reimbursing family providers preventative mental health treatments.

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by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

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Max Politics Podcast: Senator Gustavo Rivera on the New State Budget


Senator Gustavo Rivera (photo: NYS Senate Media Services)


May 4, 2023 - Max Politics Podcast: Senator Gustavo Rivera on the New State Budget

State Senator Gustavo Rivera, a Bronx Democrat and chair of the Senate health committee, joined the show to discuss the newly-passed $229 billion state budget for the 2023-2024 fiscal year, which began April 1.

Listen to the conversation and let us know what you think, on Twitter @TweetBenMax. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts at Max Politics.

Read more: Max Politics Podcast: Senator Gustavo Rivera on the New State Budget

State Budget Includes $1 Billion Mental Health Agenda, Additional Push to Restore Psychiatric Beds


Gov. Hochul talks mental health care (photo: Darren McGee/Governor's Office)


Governor Kathy Hochul is touting the inclusion of over $1 billion for mental health care in the new $229 billion budget deal recently struck with legislative leaders.

"When it comes to keeping people safe, there are commonsense places we can start as well. One of them has to do with fixing our mental health system because it is broken, the rates of mental illness have been on the rise, and the pandemic only made matters far worse," Hochul said Thursday evening when she announced the framework of a budget deal.

"Too many people can't get the care they need, and for too long we've underinvested in mental health," she said.

While the funding has broad applications for the governor's "continuum of mental health care" vision, part of it relates to ongoing challenges to her goal of reinstating over 1,000 psychiatric beds in hospitals across the state to directly deal with the most serious mental illness.

The new budget allocation includes $14 million for mental health care workforce recruitment and retention at a time when hospitals have been unable to open psychiatric beds, and in some cases shuttered more units, in part due to severe staffing shortages exacerbated by the pandemic.

Hochul has been pushing hospitals to reopen psychiatric units closed during the pandemic using a mix of incentives, punishment, and workforce development spending. Those efforts have largely been frustrated by the scarcity of needed clinical and support staff and the costs of renovations for financially strapped facilities.

More than 600 beds, out of an initial 1,050, remained offline this spring, including more than half in New York City. While New York City Health + Hospitals, the city’s public hospital system and largest inpatient provider, plans to restore most of its shuttered beds by the end of this year, most facilities throughout the state continue to struggle to do so.

This week, state lawmakers voted through the budget bills negotiated among Hochul, Senate Majority Leader Andrea Stewart-Cousins, and Assembly Speaker Carl Heastie, all Democrats, after weeks of logjam over bail, housing, charter schools, and other contentious policy issues. Less fuss was made over the governor's mental health agenda, which went largely uncontested in each chamber's one-house budget response.

Last year, Hochul and the State Legislature allocated $55 million in state and federal funds to increase Medicaid reimbursement rates for psychiatric beds in general hospitals to bring them closer to regular medical bed rates. They also included $9 million for loan forgiveness for psychiatrists and psychiatric nurse practitioners to help fill needed positions.

Earlier this year, the state Office of Mental Health and state Health Department issued an ultimatum to hospitals requiring them to bring all licensed beds back into service by April 1 or face fines and other sanctions. In the state budget this year,

Hochul successfully pushed for legislation to allow OMH to impose penalties of up to $2,000 per violation per day (up to $25,000) on hospitals operating below the psychiatric bed capacity listed on their license agreement. The move is a bitter pill for some hospitals that have been operating below capacity for years, often as part of plans developed with OMH.

In the new budget for the fiscal year that began April 1, loan forgiveness funding increased from $9 million to $14 million. The language was expanded to include "other licensed clinicians" in facilities with "critical capacity shortages," after hospital officials pushed for aid to other important roles like social workers and technicians.

Another $3 million from the state's General Fund is available for loan forgiveness for psychiatrists who agree to work for three years in hospitals or outpatient services in underserved areas. That funding was included in last year's budget as well. The budget also includes a 4% cost of living adjustment for some mental health workers.

On Wednesday, the governor's office issued a series of press releases touting elements of the new state budget, including one highlighting over $1.4 billion in mental health spending. 

"Decades of chronic underinvestment has allowed far too many New Yorkers to fall through the cracks in our State's mental health care system," Hochul said in an accompanying statement. "The plan to fix our State's continuum of mental health care marks a monumental shift in our approach, reversing years of neglect to our system and bringing bold investments to ensure that everyone in our state has access to the high-quality care they deserve."

Also Wednesday, the governor touted the funding when asked about a man in apparent psychological distress who was killed in the subway by a fellow passenger. "​One element we have not talked about is the billion dollars investment in mental health services so we don't have people who are homeless in our subways, many of them in the throes of mental health episodes, and that's what I believe were some of the factors involved here," Hochul told reporters when asked whether she thought the individual should be charged in the death, adding she needed more facts about the case and calling it "deeply disturbing."

Hochul's mental health care agenda is focused on expanding inpatient and outpatient services, and insurance coverage of mental health and telehealth care.

It includes $48 million to add 150 long-term beds in some of New York's 24 state-run psychiatric institutions.

Hochul secured $182 million for outpatient mental health services, including new psychiatric emergency programs in hospitals, a dramatic increase in the number of Certified Community Behavioral Health Clinics from 13 to 39, and new mobile treatment teams. It also pays to expand capacity at 20 private behavioral health clinics.

Close to $3 million will go to peer-based outreach programs and $28 million will support the creation of 50 Critical Time Intervention teams, a care coordination model touted by Hochul and Mayor Eric Adams.

Another $30 million will go towards mental health services in schools, Hochul said last week.

That money "will help meet the needs of our children and hopefully cut the demand for services by half over the next five years," she said last week. "They need services now. You give them the services now, you keep them from needing more serious services in the future."

It also uses $42 million over two years to reimburse family and children providers for  preventative mental health services. It also requires insurance companies to cover a range of mental health services including crisis intervention and post-discharge.

The 988 suicide and crisis hotline will receive an additional $60 million, a $25 million increase from last year's budget.

The bulk of the funding is for capital and operating expenses needed to create and sustain supportive housing units, including 3,500 units for people at risk of homelessness. 

Outside the $1 billion for mental health care, the final budget agreement also includes $500 million for distressed safety-net hospitals and increased rates for enrollees in Medicaid and the state's Essential Plan for low-income New Yorkers.

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by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

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Budget Includes $39.5 Million for New State Public Campaign Finance System


 

In the Legislature (photo: NYS Senate Media Services)


State lawmakers this week approved Governor Kathy Hochul's proposed $39.5 million allocation to New York's new campaign finance system, including base funding for a small-dollar public match.

The funding includes $25 million for public matching funds that will be available to participating candidates running for statewide and legislative offices beginning in 2024. It also includes the full $14.5 million sought by administrators to run the program.

The new system, passed by Democrats in 2020, lowered individual contributions limits and will multiply small, in-state or in-district donations starting at a 6-to-1 match for contributions below $250. Modeled on New York City's decades-old system and the Campaign Finance Board that runs it, good government groups say the new state system will make outsider candidates more competitive, help increase diversity among state-level elected officials, and incentivize candidates to engage with more voters.

"Governor Hochul is committed to restoring trust in government, and that includes ensuring the Public Campaign Finance Board has the resources it needs to fulfill its obligations under the law," wrote spokesperson Hazel Crampton-Hays in an email to Gotham Gazette.

Lawmakers passed and Hochul signed the $229 billion budget this week, almost a month after the April 1 start of the fiscal year, following weeks of debate among Hochul and legislative leaders over bail reform, housing policy, and other issues. 

The new campaign finance funding comes after uncertainty during budget negotiations about implementing the program – including potentially postponing it. As late as March, Senate Majority Leader Andrea Stewart-Cousins would not rule out the possibility of delaying the small-dollar match until after the 2024 elections, when all 213 seats of the State Legislature will be on the ballot. Doing so would give incumbents seeking reelection one more chance to go before voters under the rules that last got them elected.

Advocates waged a campaign in the weeks leading up to the final budget agreement to preserve the system as lawmakers had passed it three years ago and provide it the funding requested by the new Public Campaign Finance Board. The final budget contains no delays nor does it otherwise tinker with the program.

"Public financing has made New York City elections more accessible and fair, and that's exactly the goal for statewide public campaign financing," said Senator Zellnor Myrie, a Brooklyn Democrat and chair of the Senate’s elections committee, in a statement to Gotham Gazette. "I'm really pleased we secured funding to expand the program in this year's budget because our democracy is stronger when the playing field is level."

"I am excited that lawmakers have taken the next step by funding the program in the state budget," said Assembly Member Latrice Walker, also a Brooklyn Democrat and the Assembly's elections chair, in a statement. Walker voted against the budget over opposition to rollbacks of bail reforms she championed in 2019.

"The seats of government should be open to people like me who grew up in public housing developments in Brownsville. Seats should be open to people who are not beholden to hedge funds and mega-donors. This is good for democracy,” Walker added.

Earlier this year, Democratic supermajorities in the State Senate and Assembly each approved one-house budget resolutions in response to Hochul's executive budget proposal that included the $39.5 million for public campaign financing. Spokespeople for Stewart-Cousins and Assembly Speaker Carl Heastie did not respond to requests for comment on the funding.

Republicans denounced the funding, arguing it will spend tax dollars with few returns for New Yorkers.

“The public deserved a budget that made New York safer and more affordable," wrote Senate Minority Leader Robert Ortt in a statement to Gotham Gazette. "Instead they got billions in additional spending and higher taxes to help fund welfare for politicians.”

"I've said from the beginning, taxpayer dollars and political campaigns don't belong anywhere near each other,” said Assembly Minority Leader William Barclay in a statement to Gotham Gazette. “It's that simple. Democrats' willingness to dole out public money never wavers, and that's a persistent problem in New York.”

"There's a huge disparity in resources between what the financing board requested and what actually made it in the budget," Barclay added. "A $100 million request was ludicrous, it will be interesting to see how the program runs with 60 percent less than what the board said it needed."

Ultimately, the Public Campaign Finance Board, an arm of the State Board of Elections responsible for implementing the system, estimates it will need $100 million for matching funds for the 2024 election cycle when hundreds of legislative candidates will be seeking office across the state.

Supporters of the system were concerned that not including the full funding portended potential delays or clawbacks of the hard fought victory. Hochul has maintained that her inclusion of the $25 million demonstrates her commitment to the new program. It builds on $20.6 included in last year's budget. The remaining funding will need to be included in next year's budget in order to reach the Board’s target.

"The agreed-upon funding for the Public Campaign Finance Program and the small donor matching system is a big and important step in giving everyday New Yorkers a stronger voice in their democracy following a frustrating budget process," reads a statement from Fair Elections NY, a coalition of advocacy and labor groups pushing for the funding. "This financial commitment to New York State's landmark program will be invaluable to its first year and affirms what a majority of voters have long demanded."

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by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

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‘An Unprecedented Commitment’: New State Budget Advances Several Major Climate Policies


Gov. Hochul talks clean energy (photo: Darren McGee/Governor's Office)


Climate activists are cheering New York’s $229 billion budget for the 2024 fiscal year, which was approved Tuesday night, celebrating three major policy victories and a series of additional funding allocations. The changes, seen as monumental by supporters and critics alike, include passage of legislation that will ban gas hookups in new construction, allow the state power authority to build and own renewable energy facilities, and create a “cap and invest” system with decreasing caps on greenhouse gas emissions, fees on those emissions, and funding for a variety of related purposes including consumers’ energy bills.

While some disappointment remains among activists and progressive elected officials as several other measures were left on the cutting room floor, there is widespread celebration as New York takes major steps toward a renewable energy future. There is also significant skepticism among conservatives and some moderates around whether New York can and should be taking such aggressive steps.

Climate legislation was one of the areas where there appeared to be broad agreement between Governor Kathy Hochul and the State Legislature, even as they clashed on other contentious issues that delayed the budget one month past the April 1 start of the new fiscal year. Both sides agreed that urgent and ambitious action is necessary to meet emissions targets set by the state’s landmark Climate Leadership and Community Protection Act (CLCPA) of 2019. The act requires a 40% reduction in statewide emissions by 2030 and an 85% reduction by 2050 compared to 1990 emissions levels. It also requires that 70% of the state’s electricity should come from renewable sources by 2030 and that 100% of the state’s electricity should be emissions free by 2040.

Much of the climate, energy, and environmental policy agenda for the year was set by long-running efforts by climate activists and the mandated Scoping Plan from the state Climate Action Council, established in the CLCPA and released in December. In January and February, Hochul then offered her agenda, informed by that Scoping Plan, setting the stage for negotiations with the Legislature.

“New York is committed to building a clean economy and protecting our environment for future generations," Hochul said in a statement on Wednesday. “This Budget shows an unprecedented commitment to green infrastructure, reducing emissions from the building sector, and protecting clean water. I thank my colleagues in the Legislature for their collaboration on a transformational Budget that represents one of the most ambitious packages our state has advanced as we continue the fight against climate change.”

The governor’s marquee climate-related achievement is the cap-and-invest program that will impose a cap on greenhouse gas emissions, to be reduced every year, and require the state’s major emitters and fuel distributors to buy allowances for their emissions. The revenue raised from the program is meant to be directed towards renewable energy, green jobs, and environmental justice communities, with at least $1 billion set aside for rebates to help consumers with higher energy bills.

The final budget sets the foundation for the cap-and-invest program, including labor and investment provisions, and the overall program will now have to be crafted by the state Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA) over the next year.

Two other major bills that have been longtime priorities for climate advocates also made it into the budget – the All-Electric Buildings Act, which prohibits fossil fuel hookups for heating equipment in new construction starting in 2025 for buildings of seven stories or fewer, and 2028 for almost all new buildings; and the Build Public Renewables Act (BPRA), which will allow the New York Power Authority (NYPA) to build and operate its own renewable energy projects. 

Assemblymember Robert Carroll, a Brooklyn Democrat who sponsored the BPRA, called it the “most important Green New Deal legislation to ever pass” in Albany. “This will ensure New York is a nationwide leader in the just and sustainable transition from fossil fuels to renewable energy. It will transform NYPA from a moribund agency to the most dynamic builder and owner of public renewables in the nation,” he said in a statement. 

“New Yorkers have won the most transformational climate and green jobs bill in the nation,” said the Public Power NY Coalition, which was a major proponent behind the legislation, in a statement. The BPRA is expected to create tens of thousands of union jobs in the renewable energy sector, with prevailing wage requirements and Project Labor Agreements to ensure worker protections. The coalition did, however, criticize the exclusion of stronger mandates in the legislation, such as a proposed requirement to build new projects after 2035.

The state currently does have billions invested in renewable energy projects that have been completed or are underway including wind, solar, and hydroelectric infrastructure. Just last year, the governor signed off on the largest transmission projects in the state in 50 years, approving two renewable energy pipelines that will power New York City.

The budget also requires that state facilities and campuses be entirely decarbonized by 2040, allocating $30 million to NYPA to create decarbonization plans for 15 state facilities and another $30 million to SUNY Albany for a Thermal Energy Network. And it authorizes Suffolk County to carry out a ballot referendum on creating a recurring funding source for wastewater infrastructure.

Besides legislation, there are also several climate-related funding streams in the budget including $200 million to provide relief to New Yorkers with high energy bills, $200 million to help low-income households electrify and retrofit their homes, $500 million in clean water infrastructure funding, $400 million for the Environmental Protection Fund, and $200 million to improve state parks.

Those investments will complement the implementation of the $4.2 billion Environmental Bond Act which was approved by voters in November and the state has now begun to implement.

“I think overall we're happy with [the state budget],” said Pat McClellan, policy director of New York League of Conservation Voters (NYLCV), in a phone interview. “There's definitely still work to do.” All-electric buildings and cap-and-invest were among NYLCV’s top priorities.

A crucial measure that advocates also celebrated was additional state funding for the MTA. A well-functioning mass transit system, they say, is an essential component to reduce a reliance on polluting personal vehicles. “Boosting service frequency and reliability is one of the single best things you can do to get more people out of cars,” McClellan said.

The budget did not advance another climate-crossover policy pushed by Hochul: denser housing, especially around mass transit stops throughout the MTA region — a policy at the nexus of climate, housing, and transit. It was part of Hochul’s larger Housing Compact plan that the Legislature rejected.

Several other proposals that activists and legislators wanted did not make it into the final deal. That includes the New York HEAT (Home Energy Affordable Transition) Act, which aligns gas utility regulation and planning with the goals of the CLCPA and ensures that low- and moderate-income families don’t spend more than 6% of their income on energy bills. McClellan said the bill is essential to cut emissions from existing buildings, which are the biggest polluters in the state.

The budget also did not include a proposed phased-in ban on new fossil-fuel heating equipment that Hochul had proposed. The idea sparked a misleading narrative that the governor wanted to require the removal of gas stoves from people’s homes, and she later backed away from the proposal. 

Another exclusion from the budget was the Waste Reduction & Recycling Act, a bill aimed at reducing packaging production and increasing recycling. “Those were both things that we were disappointed by because we’ve been pushing hard for them and we're certainly going to be revisiting them post-budget,” McClellan said.

Legislators and advocates who hailed the passage of the cap-and-invest program say both the executive and legislative branches must now ensure smart design of the program and make sure that there are adequate safeguards in place for the money that it raises. “There's a lot of work left to do on the program design,” said McClellan. “We would have liked to have seen some more detail in the budget bills in terms of what types of spending will happen with those revenues and what types of guardrails will be in place to make sure that we're getting serious reductions in disadvantaged communities.”

That point isn’t lost on lawmakers. Senator Pete Harckham, a Westchester Democrat who chairs the Senate’s Committee on Environmental Conservation, said in a phone interview that he and his colleagues will continue to push for mandates on how investments are funneled from the program. Harckham has sponsored the Climate and Community Protection Fund bill, which would ensure that cap-and-invest proceeds go towards accomplishing the goals of the CLCPA including building efficiency retrofits, green energy infrastructure, mass transit, affordability rebates, and more. “We’ll try and move that bill this year,” he said. Legislators have about a month of session left this year.

“While we didn’t get everything we wanted on the invest side, we got important principles in there,” Harckham added, pointing to union labor provisions with prevailing wage standards for new renewable projects that were included in the budget. “We established the principle that the governor will come back to the Legislature before spending the funds. That’s really an important separation-of-powers victory, and we put our flag in the ground about disadvantaged communities.” 

He also intends to prioritize waste reduction legislation in the post-budget session. “I'm optimistic that we can get there on waste,” he said. 

In a phone interview, Katherine Nadeau, deputy director of environmental group Catskill Mountainkeeper, praised the Legislature for removing a proposal in the cap-and-invest program, backed by the governor, which would have given certain businesses free allowances for emissions and for putting the revenues from the program into the budget, making it “subject to appropriation, and that is going to be a democratic process for moving those billions of dollars. out across the state to support climate solutions.”

The governor also backed away from another proposal opposed by Democratic legislators that would have changed the way that the state accounts for methane emissions.

Nadeau said the state should now move to pass the NY HEAT Act, which would also eliminate the so-called “100-foot rule” that requires utilities to install gas lines for new consumers for free if they live within 100 feet of an existing main gas line. Existing utility customers pay increased costs, effectively subsidizing fossil fuel infrastructure. 

“The budget is a big, complex document and this is a great example where in some places we have definitely gained on the climate solutions front and on meeting the need that the climate crisis presents to New Yorkers, and there are other places where there's so much work to be done,” Nadeau said. 

Conor Bambrick, director of policy for Environmental Advocates NY, praised the budget for taking “a significant stride towards tackling the climate crisis and protecting our most vulnerable communities.” But he expressed some disappointment that it did not dedicate funding to replace lead lines around the state. “With an estimated 500,000 of these pipes continuing to expose low-income New Yorkers and communities of color to a dangerous neurotoxin, state leaders must prioritize getting the lead out before the end of session by passing the Lead Pipe Right to Know Act,” he said. “We need decisive action to put our state on track to meet the Biden administration’s goal of 100% lead service line replacement in the next 10 years.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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CUNY Tuition to Remain Flat as University System Gets Funding Boost in State Budget


At CUNY (photo: @CUNY)


In the new state budget that was passed Tuesday night, the City University of New York, CUNY, will get significant operational and capital funding boosts while students from New York will be spared tuition increases, Assembly leadership announced on Tuesday.

The State Legislature is approving budget bills in Albany, bringing the $229 billion state budget for the 2024 fiscal year to a conclusion, one month after it was due.

While all final details have yet to be dissected, Assembly Speaker Carl Heastie announced on Tuesday that the CUNY system, which has more than 220,000 students enrolled across 25 colleges, will receive $821.4 million in operating funds, a $103 million increase, in the enacted state budget.

The budget will also keep tuition rates flat for in-state CUNY students, after the State Legislature rejected a proposal by Governor Kathy Hochul to raise tuition by indexing increases to the Higher Education Price Index or 3%.

“Ensuring public colleges and universities remain affordable and accessible to all New Yorkers is a top priority for the Assembly Majority,” Heastie said in a statement on Tuesday afternoon. “This year, as always, we fought to ensure that tuition remains as it is today and that our SUNY and CUNY schools have a multiyear commitment of funding that is necessary to continue delivering a world class education to students.”

"We’ve rejected any tuition hikes to in-state SUNY and CUNY rates, keeping higher education within the economic reach of all of New York’s students, and ensuring no one is priced out of the education they’ve earned," said Senate Majority Leader Andrea Stewart-Cousins, in her budget floor remarks on Tuesday. 

The budget includes an additional $213 million for opportunity programs that provide academic and financial assistance and are offered at all CUNY colleges, certain SUNY schools and even some private institutions, according to the Assembly.

The budget will also invest $1.1 billion in capital funding for CUNY, including $384 million for maintenance of facilities, $535 million for expansion and major renovations, and $119.7 million for community colleges. The state is also expanding abortion access for CUNY and SUNY students through legislation that guarantees access to abortion medication at campus clinics or through referrals to local and telehealth providers. Governor Hochul signed the bill on Tuesday. 

“I’m proud this year’s budget includes investments that will ensure New York State’s higher education system remains affordable, competitive, and a national and international pinnacle of postsecondary education,” said Assemblymember Patricia Fahy, who chairs the Assembly’s higher education committee, in a statement.

Hochul’s proposed tuition increase was a response to CUNY’s financial struggles, where enrollment, and therefore tuition revenue, has dropped significantly during the pandemic, particularly at community colleges.

In February, the New York Post reported that CUNY Chancellor Félix Matos Rodriguez had implemented a hiring freeze and called for budget cuts as preliminary fall enrollment had fallen to 220,260, a 9% decrease from 243,000 in the fall of 2021 and nearly 19% from the 271,242 students enrolled in the fall of 2019. With additional funding in the state budget, it's unclear whether those spending cuts may continue. "Governor Hochul and legislative leaders realize how instrumental public education is to transforming our state and this funding plan will help ensure CUNY’s continued ability to uphold its historical mandate of providing a first-rate public education to all students, regardless of means or background," Matos Rodríguez said in a statement on Wednesday.  

Lawmakers, CUNY faculty, students, and education advocates have been protesting the governor’s proposed tuition increase throughout the budget process, while simultaneously calling for the passage of a “New Deal for CUNY” package to build upon CUNY-related gains made in last year’s budget. The legislation, sponsored by Democratic State Senator Andrew Gounardes, would add $1.7 billion in operating aid for CUNY over five years in order to eliminate tuition and fees, hire thousands of additional full-time faculty, increase adjunct pay, and hire hundreds of mental health counselors and academic student advisors. "This year's budget is not all we had hoped for, but I’m proud that we were able to bring a number of crucial initiatives over the finish line," Gounardes said in part in a statement on Wednesday that touted additional investments in CUNY. 

The Professional Staff Congress CUNY, the union that represents 30,000 CUNY faculty and professional staff, also celebrated the budget. "CUNY faces considerable challenges, but we are now a step closer to a New Deal for CUNY—a New Deal for Higher Education," said PSC CUNY President James Davis, in a statement on Wednesday. "New Yorkers are ready for a free and fully funded public university system and we are committed to making that vision a reality. Our students deserve no less."

The funding for CUNY in the state budget now sets the stage for another fight in New York City, where City Council members and advocates are also hoping to stave off cuts to the system in Mayor Eric Adams’ $106.7 executive budget for the 2024 fiscal year, which starts July 1.

The mayor’s budget sets CUNY’s funding at $1.29 billion, down about $150 million from the budget adopted last June and about $229 million lower than the city’s modified spending forecast for the current fiscal year. The city is largely responsible for funding CUNY's community colleges.

When he released his executive budget last week, the mayor added funding for certain CUNY programs including $4.8 million for CUNY Inclusive Economy Initiative programs, $5.8 million to expand the CUNY Reconnect program, and $1 million for the Medgar Evers College Brooklyn Recovery Corps.

At the same time, in repeated attempts at cost-cutting, the mayor has implemented several rounds of a Program to Eliminate the Gap (PEG) that reduced CUNY funding by $18.4 million in the current fiscal year and $41.3 million for next fiscal year. A significant portion of those funding reductions are from cutting budgeted personnel vacancies.

Even prior to the executive budget, the City Council had pushed back against the mayor, calling on him to restore and baseline funding to CUNY, and that advocacy is likely to continue as the Council begins examining the executive budget next week.

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

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Note - This article has been updated. 

It Could Take Years to Restore Hospital Psychiatric Beds Statewide, Records Show


Gov. Hochul talks health care (photo: office of Governor Kathy Hochul)


It could take years and tens of millions of dollars for upstate hospitals to restore more than 200 psychiatric beds that were shuttered in recent years, owing to major operating deficits and an industry-wide staffing shortage with no end in sight, according to records obtained by Gotham Gazette.

The delays throw a wrench in Governor Kathy Hochul's plan to restore 1,050 psychiatric beds that had been closed or repurposed statewide during the pandemic – a top priority since her first State of the State address in January 2022, and a key pillar of the $1 billion "continuum of mental health care" she pursued in the state budget.

The beds have become an increasing focus for city and state leaders as the pandemic has brought untreated severe mental illness further into public view, exposing bottlenecks in the mental health care infrastructure caused in part by decades of divestment.

There are 5,780 inpatient psychiatric beds in use in general hospital settings – known as Article 28s for the state law that regulates them – and behavioral health clinics across New York, often the first point of contact for people experiencing a psychological or substance use crisis. Another 3,300 long-term beds are in state-run psychiatric institutions.

Mandatory plans submitted by hospitals to the New York State Office of Mental Health (OMH) and reviewed by Gotham Gazette after a Freedom of Information request describe a near universal struggle to staff inpatient psychiatric units across the state, from Long Island to Buffalo, Manhattan to the Mohawk Valley. The records show that in order to continue admitting people with severe mental illness, many hospitals are relying on expensive travel nurses and physicians, straining resources.

Upstate hospitals, like their counterparts in New York City, are seeking millions of dollars from the state to help pay for personnel and renovations to bring units up to code, many of which had been repurposed as medical beds at the height of the pandemic. Most measure the length of time it will take to onboard beds in months and years and long-term construction timetables.

The hospital plans are a response to a January 10 ultimatum from OMH and state Health Department brass, requiring facilities, under threat of sanction, to restore any non-operational beds in their licensure by April 1.

"The directive to immediately reopen the remaining six beds is currently impractical and unsafe for both patients and staff," wrote one hospital administrator in a letter to OMH Commissioner Ann Marie Sullivan. Another said it would "bankrupt the hospital."

Gotham Gazette first reported that hospitals statewide were on track to blow the state deadline because of workforce shortages and large capital needs, particularly in New York City, which accounts for roughly half of the shuttered beds. But the new documents reveal for the first time the extent of those challenges for hospitals in some of the most remote corners of the state, where beds are few and far between. The reports show similar pressures to those faced by their New York City counterparts – whose plans were also obtained by Gotham Gazette and first reported by Politico – albeit reflected through the prism of distance and scarcity unique to much of upstate New York.

The state ultimatum was part of a campaign from the Hochul administration to induce hospitals to bring beds online. But the responses show most facilities have been in coordination with OMH on their bed capacity before and after the January 10 ultimatum letter. In several cases, beds were closed for years prior to the pandemic through planned downsizing in partnership with OMH.

Last year, Hochul and the Legislature allocated $55 million to increase Medicaid reimbursement rates for the Article 28 psychiatric beds. They also invested an additional $9 million in tuition assistance to build the healthcare workforce. And earlier this month, Hochul announced the first awards under a $4 million scholarship program for SUNY and CUNY students pursuing careers in mental health care.

This year, Hochul is seeking state legislation to increase fines up to $2,000 per day for hospitals operating below their licensed capacity of psychiatric beds.

"It starts with getting more patient beds, more psychiatric beds back online, because right now we have 3,200 New Yorkers struggling with mental illness or addiction who are living on our streets and in the subways," Hochul said in a February 2 speech about her mental health agenda, which also includes more long-term beds in state institutions, supportive housing, and outpatient services.

Despite greater funding, more than 600 of the 1,050 previously offline beds remained out of service this spring, with close to 300 of them in hospitals outside New York City. Within the city, more than 300 psychiatric beds were offline as of March, with the largest single provider – New York City Health + Hospitals, the public hospital network – scheduled to reopen 200 by December at a cost of $700 million.

“Since Governor Hochul took action to restore psychiatric hospital beds taken offline during COVID, hospitals have developed plans to bring a majority of the repurposed psychiatric beds back online," wrote OMH spokesperson James Plastiras in an email statement to Gotham Gazette.

"Governor Hochul's FY24 Executive Budget proposes increased financial penalties for hospitals that are not making a good faith effort to bring beds back online, and OMH is in active conversations with Article 28 hospitals on how best to achieve compliance," he said.

Since September, 213 psychiatric beds have come back online statewide, with another 300 expected by January 2024, according to Plastiras. He would not say whether any hospitals had been penalized, in the form of fines or other enforcement action, for not meeting their licensed capacities.

O​n Thursday, Hochul announced a $229 billion "conceptual agreement" with legislative leaders on the state budget, including $1 billion for mental health care.

​"​Too many people can't get the care they need, and for too long we've underinvested in mental health," ​Hochul ​said. "​Today marks a reversal in our State's approach — a monumental shift.​"

​"​That'll include investment to create 1,000 inpatient psychiatric beds to serve more than 10,000 New Yorkers a year​," she said.

Upstate Challenges
Upstate behavioral health systems have seen increasing strain in recent years. Closures in past decades due to low demand in rural parts of the state have come back to bite those communities, the records show.

In the new reports, written over the past three months, several hospitals described seeing high demand for psychiatric services but lacked the configuration or staff to admit patients, leaving people stranded in emergency departments. And a lack of residential and outpatient services in upstate communities has drawn out the length of time individuals are held on hospital psych wards, in some cases for months, according to the documents.

Hospitals have also seen an exodus of mental health workers in recent years as burnout and non-competitive pay push them into other jobs and fields. Some facilities have been left with a single psychiatrist to manage more than a dozen cases with a skeleton support staff.

Almost every one of the 19 hospital plans reviewed by Gotham Gazette cited the need for both new staff and renovations to remove ligature risks that can be used for self-harm – a critical danger for the inpatient psychiatric population, many of whom are experiencing acute psychosis, depression, or anxiety.

BryLin Behavioral Health Hospital in Erie County, for example, is certified for 84 psychiatric beds with the ability to bring 59 online by April 1, according to Jerri Ritter, vice president of patient care services, in a February letter. The center would have to renovate four bathrooms in order to meet requirements from the Facility Guidelines Institute, a nonprofit that promulgates standards for hospital design and construction. In total, BryLin estimated it would cost $5.6 million in new salaries, capital improvements, and IT upgrades to bring the beds into operation.

BryLin's letter also offered insight into the difficulties of recruiting staff. Of the 265 applications the hospital received for nurses and mental health technicians, only 35 were offered a position and only 16 accepted. Only three out of every five applicants qualified for an interview, according to the letter.

Thin Staff
Glens Falls Hospital, part of Albany Med Health System, has 30 licensed psychiatric beds but since August the hospital has not been able to fill more than 24 beds due to short staffing, according to its report to OMH.

The hospital recently lost a full-time psychiatrist and now has only one doctor for its entire inpatient operation. It relies on per diem physicians to cover nights and weekends. More than half the nurses on the psychiatric unit are also hired from agencies on a temporary basis. In 2022, the system spent $3.3 million on per diem doctors and nurses, close to four times its per diem spending in 2019 before the pandemic.

To staff the full 30 licensed beds (just six more than at present), Glens Falls estimates it would need to hire a full-time psychiatrist, two full-time RNs, and more than three other technicians and support staff.

"We have been actively recruiting for these positions since 2020, in other words, prior to the pandemic, with limited success," wrote President and CEO Paul Scimeca on January 24. "The availability of locum psychiatrist and agency RN's is also very limited."

"There are some with whom we had contracted with and then needed to release due to quality-of-care issues," he added.

The dangers of the job add to the recruitment challenge. "As I sit here composing this response, there have been three 'Code Grays' called seeking immediate help for a behavioral health patient who is threatening staff," Scimeca wrote. "This happens all day, every day. This is an acute dangerous population and patient and staff safety is critically important and a constant challenge."

The need for beds at Glen Falls is indeed great. On the day of Scimeca's writing, the hospital's seven-bed crisis stabilization unit was at capacity, forcing two patients to be seen in the Emergency Department. Eight of the nine patients that day were children, aged 8 to 17, one of whom had been waiting nearly two weeks for a more appropriate placement at another facility, according to the report.

Long waits in what are meant to be temporary crisis relief units are frequent as providers struggle to find treatment placements in long-term facilities or community-based programs. Two adolescents were recently admitted to Glen Falls Hospital for 84 days and 117 days, respectively, while they awaited beds in a residential facility, according to the report.

The workforce shortage has pushed the doctor-to-patient ratio higher and stretched hospital psych wards to their limit across upstate New York.

St. Peter’s Health Partners, a Capital Region hospital licensed for 60 psychiatric beds, had 13 beds offline in late January. The only psychiatrist on the geriatric unit at the time was seeing 16 patients a day.

St. Mary's Healthcare reduced its capacity from 20 beds to 10 beds when its clinical director and psychiatric nurse practitioner resigned, leaving one psychiatrist treating ten patients. On January 9, St. Mary's explained the decision to cut bed capacity in a letter to the OMH Field Office, which was "received and acknowledged," according to the hospital's bed plan. A day later, OMH issued the ultimatum to hospitals.

The High Cost of Psychiatric Care
Most of the inpatient psychiatric programs face significant operating deficits and many hospitals lack capital funding to build new units.

Erie County Medical Center, one of the biggest behavioral health care providers in the Buffalo metropolitan area, is licensed for 160 beds, with 136 open and staffed. ECMC estimates it will take at least two years to finish construction on a 24-bed unit, whose planned remodeling was stalled by the onset of the pandemic. To meet state and federal safety regulations, the patient area must be "completely renovate[d]," from the plumbing to the doors, according to its report in February. But first ECMC must secure roughly $8 million through the state and, once construction is completed, fill nearly 60 staff positions.

The financial strain caused by the pandemic has made that all but impossible.

"Currently, the pandemic has significantly reduced ECMC’s days of cash on hand, leaving ECMC in severe financial hardship and only with enough capital dollars for maintenance," the report reads.

One hospital, Niagara Falls Memorial Medical Center, is projecting a $25 million operating deficit in 2023, and potentially millions of dollars more to bring psychiatric beds online. But the added expense would "bankrupt the hospital and seriously jeopardize our ability to continue to operate 28 existing inpatient behavioral health beds," warned President and CEO Joseph Ruffolo in a January 23 letter.

Even with the state's $55 million Medicaid boost, the cost of keeping an inpatient bed open often outpaces the state's reimbursement rates, according to hospital administrators. Erie County Medical Center's inpatient units, for instance, lose roughly $15 million annually because of the discrepancy between costs and reimbursement from the state, according to its letter to OMH.

Design Flaws
The configuration of beds and the unique needs of the psychiatric patient population has further tied administrators' hands.

Nassau University Medical Center, on Long Island, is licensed for 128 beds. Currently, an 11-bed adolescent unit is shut down, and a 19-bed so-called forensic unit – for people who entered the system through the criminal legal system – is down to 15 beds out of safety concerns "due to the acuity" of the population.

According to a letter in January, all 26 licensed beds at Albany Medical Center are online but logistical constraints mean they aren't always occupied. The psych unit contains no single rooms meaning patients are either doubled-up, or quadrupled up.

"If there are patients that cannot safely have a roommate, many of the doubles often become singles," wrote Kara Ritschdorff, director of hospital regulatory affairs. "This scenario predates the COVID pandemic and is a flexibility critical to ensuring patient safety."

"If it is the Office’s plan to monitor compliance via the daily OMH Bed Availability survey…we would strongly suggest that the survey undergo revision to allow facilities to explain why total bed availability may not reflect licensed capacity," Ritschdorff wrote. "In addition to safeguarding facilities from unnecessary enforcement actions, it will also allow the Office a clearer picture what is truly happening within the inpatient setting."

Years in the Making
Some facilities have been operating below capacity for years, in some cases decades, prior to the pandemic.

Rochester Regional Health, is licensed for 104 beds across four hospitals but only has 70 in operation. That is only five fewer beds than the system had online in 2019, before the pandemic, according to the plan sent to OMH. The bulk of those have been offline at least since 2013, when RRH shuttered 20 beds "in collaboration with the local governmental unit and the local NYS OMH field office."

Last year, RRH submitted a $9 million grant application to the Department of Health for facility improvements, including expanding inpatient psychiatric beds, that had yet to receive a determination at the time of its letter.

Another example is Bassett Medical Center in Cooperstown, which has been operating with only fourteen psychiatric beds, six fewer than listed in its operating certificate. That arrangement predates the pandemic, having begun a decade ago when the hospital remodeled its units – but the inaccurate licensure was only discovered when the OMH ultimatum was issued, according to a January 24 letter. As a remedy, administrators plan to apply to have the six beds removed from Bassett's certificate altogether.

Similarly, Mohawk Valley Health System has been operating far fewer than its 50 licensed beds with plans to restore some but not all of them. MVHS already has conditional approval to remain at a lower level, part of an existing plan to relocate its two hospitals into a single new facility, according to its letter.

Strong Memorial Hospital has been operating 83 inpatient psychiatric beds, ten below the number listed in its operating certificate, since 1996, when its occupancy rate was 75% or below. In order to maintain its capacity and adhere to pandemic protocols, Strong Memorial leased 11 beds in nearby Rochester Psychiatric Center, a mid-sized state-run institution. The hospital is renovating a unit to restore the ten closed beds, which is expected to be completed in early 2024.

UPMC Chautauqua has had 30 beds, 10 fewer than licensed, after OMH approved a plan to keep them shuttered in 2019, according to its report. Staffing issues required it to close five more beds in October 2021, which were reopened in January. The letter notes that a new addition to the facility built in 2019 with OMH approval prevented the construction of a new psychiatric unit.

"Therefore, there is not capability to expand the unit or the structure," wrote Cecil Miller, vice president of operations.

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by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

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Max Politics Podcast: Why Housing Policy Negotiations Fell Apart in Albany, with Cea Weaver


Gov. Hochul (photo: Mike Groll/Office of Governor Kathy Hochul)


April 25, 2023 - Max Politics Podcast: Housing Policy Falls Out of the State Budget, with Cea Weaver

Cea Weaver, campaign coordinator for Housing Justice for All, joined the show to discuss state budget negotiations, the apparent demise of negotiations over housing policy, and the left-wing perspective on the issue and key components of the debate, including Good Cause Eviction, the governor's Housing Compact, and more.

Listen to the conversation and let us know what you think, on Twitter @TweetBenMax. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts at Max Politics.

Read more: Max Politics Podcast: Why Housing Policy Negotiations Fell Apart in Albany, with Cea Weaver

How Much to Raise, How Much to Spend: Hochul and Legislature Wrangle Over Tax Rates in State Budget Negotiations


Gov. Hochul makes a budget presentation (photo: Mike Groll/Governor's Office)


When Governor Kathy Hochul delivered her State of the State address in January, she promised to keep income taxes flat this year while identifying other revenue sources to pay for major funding needs.

"A majority of economists are predicting a recession," she said. "And it's also one of the reasons why we will not be raising income taxes this year."

The Legislature is now putting that promise to the test, seeking to increase taxes on the state’s highest individual and corporate earners as the legislative and executive branches negotiate a roughly $230 billion state budget.

Hochul, a Democrat, and the two Democratic supermajorities in the Legislature are divided over how to fund critical state functions and new priorities as pandemic-era federal aid dries up. A two-year boom in tax revenues due to a prior tax increase on top incomes combined with higher-than-anticipated earnings during the covid recovery is expected to yield to slower growth driven by high inflation and fears over a possible recession.

But the state currently remains flush with cash – entering the fiscal year with a $8.7 billion surplus – as leaders decide on a spending plan while putting billions more into reserves. Budget gaps in the outyears – fiscal years 2025, 2026, and 2027 – are expected to total $22 billion, primarily due to a drop in projected tax receipts and high ongoing levels of spending. The state budget has increased from $175.5 billion in fiscal year 2020 (the last pre-pandemic deal, struck in April 2019) to the expected roughly $230 billion budget for this fiscal year.

Hochul, Senate Majority Leader Andrea Stewart-Cousins, and Assembly Speaker Carl Heastie have been nearly deadlocked over the budget, now three weeks late, with discussions dominated by bail and housing policy. Looming behind them is a long list of other policy and fiscal decisions, with how much the state will raise and spend underpinning much of it. Part of that is a debate over raising taxes on the state's highest earners to pay for mass transit, healthcare, and a menu of other priorities held by various stakeholders.

Roughly a third of state revenue comes from personal income and corporate franchise taxes. Those funding streams account for about two-thirds of the revenue the state can raise directly without federal sources. Income taxes, the single largest non-federal funding source for the state government, fell steeply to $58 billion in Fiscal Year 2023, after reaching a peak of more than $70 billion the year before — though the projected income tax receipts this year are still higher than fiscal years 2019, 2020, and 2022. The expected drop this year is largely due to a so-called Pass-through Entity Tax, which gives certain corporations the option to pay an additional tax in exchange for personal income tax credits for their shareholders and other affiliates.

Proponents of higher taxes on the rich argue the boost could raise hundreds of millions to tens of billions of dollars to support programs for struggling New Yorkers like child care, affordable housing, health care, and education. Opponents, including Hochul, argue that already-high tax rates are responsible for an exodus of some high-income earners and going further could jeopardize the state's economic competitiveness.

Lawmakers are seeking new revenue in the face of concerns over the MTA's solvency, now with a $4.6 billion four-year shortfall, stress on the health care system, the costs associated with an influx of asylum-seekers to New York City, and other challenges and opportunities.

To fund those and other priorities, Hochul is looking to extend a 2021 tax increase on the most profitable companies. But she has resisted calls from Democratic lawmakers to raise personal income taxes on top individual earners while keeping in place increases passed in 2020 and also moving ahead with the next step in a modest, multi-year middle-class income tax cut.

The funding from the corporate tax increase extension, along with an additional payroll tax on downstate businesses to support the MTA, is expected to raise close to $2 billion in additional annual revenue, according to the governor's projections.

Both houses of the Legislature proposed higher corporate tax rates while rejecting Hochul's "payroll mobility tax" increase in their one-house budget resolutions, passed in mid-March. The chambers also both backed income tax increases on individuals in the top two brackets, those making more than $5 million and $25 million annually.

The different revenue and spending plans were followed by the launch of more intensive budget negotiations among the three Democrats, who have been meeting regularly behind closed doors over the past month with little to show for it.

On Wednesday of this past week, Stewart-Cousins told reporters she hoped negotiations were "at the beginning of the end" but that no agreement on taxation had been made.

"We haven't had a discussion about that," she said of proposals to raise taxes on the very wealthy. "We, in our one-house [budget resolution], talked about that possibility but it's not at the table right now."

On Monday, State Comptroller Thomas DiNapoli released a report showing tax collections in the last fiscal year exceeded the governor's amended executive budget forecast by $2.9 billion but were still $9.5 billion lower than the year before. In total, the state collected $111.7 billion in fiscal year 2023, which ended March 31.

"We are obviously taking a look at what is going on and the Comptroller's report certainly is informative," Stewart-Cousins said on Wednesday.

The fight over tax rates is playing out in the hallways of the State Capitol where advocates for and against increases are making their positions known. On Tuesday, a coalition of Democratic legislators and advocates supportive of the "Invest in Our New York" package of major tax increases and additional spending called on Hochul to accept tax hikes on New York's millionaires and billionaires.

"We must create a fairer, more inclusive society by investing in essential services, raising the minimum wage, and ensuring that the wealthiest contribute their fair share," said Assembly Member Michaelle Solages, a Nassau County Democrat, in a statement.

Nathan Gusdorf, executive director of the Fiscal Policy Institute, a nonprofit focused on state economic and fiscal trends, supports the tax increases proposed by the Legislature and has been calling for them to be made permanent. "The budgets only increase taxes on the top 0.2 percent of taxpayers, and only on a temporary basis," he said in a recent statement. "The state's fiscal stability would be better served by broadly increasing the progressivity of our tax system for all high earners on a permanent basis."

The Empire Center, a nonprofit think tank, has argued New York's relatively high personal income tax for top earners led to an outmigration of millionaires, citing data showing the state's share of millionaire earners nationwide decreased between 2010 and 2020. But while the number of millionaire filers leaving the state rose most years between 2016 and 2021, according to state tax data, the exodus shrank by roughly a quarter in 2021, the same year income taxes were raised on the highest earners. Overall, the total number of millionaires in New York continued to rise.

A recent Fiscal Policy Institute report shows that half of New Yorkers who left the state went to neighboring high-tax states. The report suggests a greater concern is an outmigration of middle class residents driven by New York's high cost of living, especially housing.

Patrick Orecki, the director of state studies at Citizens Budget Commission (CBC), a nonprofit fiscal watchdog, said the state should be seeking other revenue sources without relying so heavily on the wealthiest residents.

"The tax environment, especially being so top heavy, can and does have a negative impact on the state's competitiveness," he told Gotham Gazette. "There are plenty of opportunities for the state to, instead of increasing taxes, find savings elsewhere in the budget."

Also at stake in budget negotiations are billions of dollars in tax breaks for a range of industries, which the governor and Legislature have each included in their spending proposals. This year, Hochul proposed increasing the state's Film Tax Credit from $420 million to $700 million a year for media productions in New York. Both chambers included the increase, along with a $100 million boost in what’s now a $200 million a year credit for Broadway theaters that Hochul also backed. Some budget watchdogs, including CBC, have argued these types of subsidies have little proven impact on job creation or economic development.

Orecki suggested the state eliminate the Film Tax Credit and similar subsidies, and seek efficiencies in other areas like the state's School Aid and Medicaid formulas — the two biggest areas of spending in the budget each year. CBC is also opposed to proposed corporate tax hikes to fund the MTA, which Orecki noted also has room for savings. "Providing just new recurring revenue we don't think is a sustainable or reasonable option," he said.

Personal Income Tax
In April 2021, the final state budget deal raised personal income taxes on three groups: individuals making over $1 million a year or married couples making over $2 million a year; anybody making over $5 million annually, regardless of filing status; and anybody making over $25 million annually.

Both legislative one-house budgets this year propose .5% rate increases on the top two income brackets for tax years 2023 through 2027. That means for people making over $5 million a year, their state income tax rate would rise from 10.3% to 10.8%. For people earning over $25 million, their state income tax rate would increase from 10.9% to 11.4%.

The Assembly projects those rate increases to raise $717 million in the current fiscal year that just began (FY 2024) and $3.5 billion total through FY 2027. According to an analysis from Citizens Budget Commission, the rate hike would impact about 22,000 individuals, based on 2020 tax data. That year, people earning over $5 million annually made up .2% of filers and shouldered roughly a quarter of the state's personal income tax liability.

Corporate Tax Rates
In 2021, New York State raised both the personal income tax and the corporate tax rates on a temporary basis. The corporate tax rate hike – from 6.5% to 7.25% on corporations with over $5 million in annual profits – was authorized for three years, from 2021 to 2023.

This is the last year for which the 7.25% rate remains in effect. Without action in Albany, the rate will revert to 6.5%. A three-year extension would raise an estimated $2.9 billion through 2026, according to the executive budget.

Hochul and both houses agree on extending the hike through 2026. But factoring into the debate over the corporate tax rate is how to pay for the MTA, with its significant operating deficit of $4.6 billion. The transportation authority is funded in part by a surcharge on large downstate businesses. Hochul and each house of the Legislature each put forward a different plan to shore up the authority’s finances.

Hochul's Payroll Mobility Tax
Hochul's executive budget proposes an increase in the "Payroll Mobility Tax" – a separate tax on businesses based on a percentage of their employees' salaries that applies to downstate beneficiaries of the MTA, including New York City subways and buses, MetroNorth, and Long Island Rail Road. The state Division of the Budget projects the tax would raise an additional $800 million annually for the MTA.

The funding would help cover the authority's operating shortfall, which has been exacerbated by low ridership during the pandemic.

The payroll tax is considered a deductible expense, outside of a corporation's taxable profits, that is borne by the employer. It is debated whether the cost of payroll taxes like these are eventually passed on to employees in the form of lower wage increases as companies seek to maximize their profits over time. Democratic lawmakers are opposing this approach in favor of bigger hikes on corporations’ taxable profits.

Hochul's plan has New York City chip in an additional $500 million per year for the MTA, which Mayor Eric Adams and legislators have opposed. In their alternative plans, the Legislature removed that potential cost shift to city as well as the slight fare increase, from $2.75 to $3, Hochul wants the MTA to move ahead with after a pandemic-era pause.

The MTA Surcharge
To pay for the MTA, both the Senate and Assembly one-house budgets rejected the payroll mobility tax, each choosing to further increase the corporate tax rate, albeit in different ways that would need to be reconciled before a budget deal is reached.

For businesses making over $5 million in profits in the downstate counties serviced by the MTA railroads, an additional surcharge on the corporate tax rate exists, specifically earmarked for mass transit. For these businesses in the so-called Metropolitan Commuter Transportation District (MCTD), that surcharge currently adds 30% of the corporate tax rate on top of the base rate. That is a roughly 2.2 point addition to the base rate of 7.25% for a total corporate tax rate of 9.425%.

The Senate proposal raises the MTA surcharge from 30% to 45%, meaning an additional 3.26 points for a total tax rate of 10.5% for businesses in the MCTD.

The Senate has not released an exact estimate for how much money the change would raise, but experts believe the increase would total close to $1 billion of additional MTA funding each year.

The Assembly proposes to fund the MTA with an across-the-board 2 point corporate tax increase to 9.25%, with the caveat that proceeds of that increase from within the MCTD catchment area would go toward the MTA. Revenue generated by the increase from businesses in the rest of the state would support transit systems in their regions.

The Assembly estimates the additional increase would generate for the MTA and other transit systems $1 billion a year on average over the next four years. Under the Assembly plan, the MTA surcharge would remain at 30% of the corporate tax rate.

***
by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

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