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Leaders of Hochul-Adams 'New' New York Panel Push Legislature to Support Housing Proposals in State Budget


The Governor, Mayor, ABNY leaders, Richard Buery & Dan Doctoroff (photo: Governor's Office)


As final negotiations over the state budget take place in Albany, a panel of experts convened by Governor Kathy Hochul and Mayor Eric Adams are urging the State Legislature to support a series of proposals to tackle the state’s immense need for new housing. 

In June 2022, the governor and mayor assembled the 'New' New York panel of more than 50 experts and leaders across labor, business, academic, nonprofit, and philanthropic circles to advise them on the future of the city and state. The panel was co-chaired by Richard Buery, CEO of Robin Hood and former deputy mayor under Mayor Bill de Blasio, and Daniel Doctoroff, former CEO of Sidewalk Labs and a deputy mayor under Mayor Michael Bloomberg. 

In December, the panel and the Hochul and Adams administrations released an action plan with 40 proposals to revive New York City’s business districts, improve mass transit and public realm infrastructure, boost housing supply, increase workforce participation, and broadly bolster economic development. 

The housing proposals included in the plan are essential to the governor’s “Housing Compact” to create 800,000 homes over the next decade and the mayor’s separate, but related, plan to build 500,000 homes in the city in that same time. But the governor’s ambitious plan, which she released in January, has met with significant resistance, including from the Democratic majorities in the Senate and Assembly.

In a letter sent on Wednesday, Buery and Doctoroff urged Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie to support proposals aimed at addressing the state’s housing shortage. The letter was co-signed by 17 other members of the ‘New’ New York panel.

“As leaders of the New York State Legislature, you understand better than anyone the severity of New York City’s housing crisis,” the letter reads. “We are writing to urge the Legislature to meet this crucial moment with thoughtful and fair-minded policy that both unlocks New York City’s housing potential and helps secure our collective economic future.”

Buery and Doctoroff emphasized that the recovery of business districts, “the fiscal foundation of our entire state,” depends on ensuring that workers have ample and stable housing. “Without this, companies will hesitate to locate in New York and we will lose out on jobs and tax revenue,” they wrote.  

They called on the Legislature to embrace the governor’s wide-ranging Housing Compact, “a common sense and achievable plan, which sets goals for communities but allows each village, town and city to tailor solutions for how to grow based on local needs.” In their respective one-house budget resolutions, the Democratic majorities in the State Senate and Assembly agreed with the governor’s proposal to set targets for regional housing growth but stripped out mandates and enforcement mechanisms. Instead, the Legislature proposed $500 million in incentives to encourage local housing creation, an approach that has failed in other states. But legislative leaders have indicated they are open to negotiations with Hochul to get to a final compromise that takes on the housing crisis. 

“We all deserve more choices for where and how we live. The old system of only offering incentives to build has not worked,” Buery and Doctoroff wrote in their letter. “Now is the time for a new path to building more units to ensure that New Yorkers have access to housing—and for every community to do its part.”

Spokespeople for Stewart-Cousins and Heastie did not respond to a request for comment on the letter from Buery and Doctoroff.

Among the more specific proposals they are pushing for is passage of legislation to eliminate the floor-area ratio (FAR) cap on residential buildings in the city, which would allow for denser development and consequently more affordable housing.

The state must also make it easier, they wrote, to convert underutilized office buildings into housing. In her budget, Hochul proposed expanding the types of buildings that are eligible for conversion while also floating a tax incentive for conversions that include a certain amount of affordable housing. The Adams administration has been supportive of both proposals. 

Both the governor and mayor have argued that a crucial aspect to their housing plans is a replacement of the 421-a affordable housing tax break, which expired last year. Hochul had attempted last year to put forward a modified alternative program, called 485-w, but it failed to get support from the Legislature. This year, Hochul did not propose a new program and instead laid the onus on lawmakers to come up with a substitute, though she is proposing an extension of 421-a eligibility for projects already in motion. 

In their letter, Buery and Doctoroff said a new tax incentive is imperative for success. “None of this will get done without it,” they wrote. “An extended period without a replacement to the prior program will mean historically low housing production at a time when everyone claims to be trying to ramp up housing production.”

The state fiscal year begins April 1, but Hochul and legislative leaders have already acknowledged that the next budget will not meet that deadline. They may pass an “extender” so state bills, including payroll, get paid while they negotiate housing and other policies.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Max Politics Podcast: Commissioner RuthAnne Visnauskas on Governor Hochul's 'New York Housing Compact'


NYS Housing Commissioner RuthAnne Visnauskas (photo: Mike Groll/Governor's Office)


March 29, 2023 - Max Politics Podcast: Commissioner RuthAnne Visnauskas on Governor Hochul's 'New York Housing Compact'

New York State Housing Commissioner RuthAnne Visnauskas joined the show to discuss Governor Kathy Hochul's New York Housing Compact proposal, negotiations with the Legislature, meetings around the state to discuss the plan, 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: Commissioner RuthAnne Visnauskas on Governor Hochul's 'New York Housing...

20 Issues to Watch as State Budget Negotiations Enter Home Stretch


Gov. Hochul addresses the Legislature (photo: office of Governor Kathy Hochul)


The Democratic supermajorities in the State Senate and Assembly recently laid their cards on the table with the passage of their chambers' one-house budget resolutions.

The resolutions serve as opening counter-offers to Governor Kathy Hochul's $227 billion executive budget and sweeping policy agenda, marking battle lines and raising the stakes on a number of key issues. They followed weeks of legislative hearings on the governor's proposals.

Hochul, Senate Majority Leader Andrea Stewart-Cousins, Assembly Speaker Carl Heastie, and members of their teams now lead negotiations as the April 1 start of next fiscal year quickly approaches. A spending plan, with whatever accompanying policy is agreed upon, is supposed to be in place by that deadline, but New York state budgets are often passed late. (Hochul’s first budget as governor was eight days late last year as she insisted on changes to the state’s bail law and a last-minute $600 million subsidy for a new Buffalo Bills stadium.)

There are several notable places where the legislative chambers differ from the governor and each other, setting the stage for heated debate — one that many other stakeholders, including Mayor Eric Adams, are trying to influence. State leaders must come to a conceptual agreement on the total size of the budget, and many details of fiscal policy, including tax rates, business subsidies, reserves levels, and more.

While this is Hochul's second budget season in the Governor's Mansion, it is her first after being elected to a full term by a relatively narrow margin and comes just after a bruising political fight with a State Senate that voted down her nomination for chief judge. Hochul laid out an ambitious agenda earlier this year through her State of the State and executive budget, and has gotten significant push back on several proposals, including to bring more housing to the suburbs, make further changes to the state's bail law, increase the charter school cap, MTA and Medicaid funding schemes, and a host of other contentious topics.

Here are 20 areas to watch as the budget unfolds:

1. Cuts and Cost Shifts to New York City
The governor’s budget proposed several cuts and cost shifts that would fall on New York City as it deals with its own fiscal pressures, particularly the $4.2 billion, two-year projected cost of the migrant asylum-seeker crisis. 

“While the executive budget contains many shared priorities, the cuts and costs shift significantly outweigh the assistance the state is providing to address the asylum-seeker crisis,” Mayor Adams said in testimony last month in Albany before the state Legislature.

The governor has proposed $1 billion in assistance over two years for migrant shelter and services, even as Adams has called for a 50-50 split of the bill between the city and state as the amount of federal assistance remains uncertain. 

Adams has also pushed back against the governor’s proposal to increase the city’s contribution to the MTA by $500 million annually, as well as a proposed increase in the Payroll Mobility Tax and expected fare hikes that would both affect New York City residents and commuters that work in the city.

While Adams supports the expansion of charter schools that Hochul is proposing via lifting the New York City cap on the privately-run public schools, the mayor has said any such move should come with additional state funding to help the city pay for the schools’ rent.

Adams is also pushing back on potential cost-shifts around Medicaid, wage increases for certain court-appointed attorneys, and more. In their budget resolutions, both houses of the Legislature crafted plans more friendly to the city’s bottom line than Hochul’s.

[Read: 6 State Budget Proposals Where Hochul and Adams are At Odds]

[Read: In Albany, Mayor Adams Testifies on Governor Hochul's Budget, State Priorities]

2. MTA Funding
The MTA survived the pandemic with the help of federal aid that is expected to run out by 2025. But the agency has a $600 million deficit that continues to threaten its finances, particularly as ridership has yet to recover to pre-pandemic levels — subway ridership has been stuck at about two-thirds of pre-pandemic numbers on most weekdays. The authority’s $19.2 billion operating budget for 2023 includes a 5.5% hike on fares and tolls this year, following through on a previously planned increase in 2021, as well as cost-cutting measures and potential cuts to service.

Governor Hochul’s executive budget proposal addressed the agency’s structural deficits with several proposals – identifying $400 million in operating efficiencies, $800 in additional revenue by marginally increasing the Payroll Mobility Tax, a $300 million infusion of one-time aid from the state, and the additional annual $500 million contribution from New York City. Under the governor’s proposal, the MTA would also receive a share of the $1.5 billion raised from licensing fees of three new downstate casinos as well as somewhere between $462 and $826 in projected annual casino tax revenue starting in 2026.   

Mayor Eric Adams has pushed back against the MTA funding proposal. He has pointed out that the city already sends the MTA about $2.4 billion annually in operating funds and that the governor’s proposal would cost the city closer to $526 million in the next fiscal year and more than $540 million every year after that. 

Assembly Democrats rejected the proposal to increase the Payroll Mobility Tax to generate an estimated $537 million and the city’s contributions to the MTA, which they estimated would cost about $369 million in the 2024 fiscal year. Instead, they called on the state to cover that funding while also pushing for $196.9 million for the MTA to avoid the fare increase to $3. They also proposed a $50 million zero-fare bus route pilot program for two routes in each borough. 

Senate Democrats also intentionally omitted the proposal to increase the city’s MTA contributions, rejected increased fare hikes in 2023 and 2025, proposed increased surcharges on for-hire vehicles, and supported the proposed free bus route pilot. They also proposed directing casino revenue to education instead of the MTA and authorizing the city to create a residential parking permit program with revenue dedicated to the MTA.

The Senate also proposed eliminating the $43 million annual property tax exemption for Madison Square Garden and sending future property tax revenues to the MTA.

3. Asylum-Seeker Funding
As New York City continues to deal with the arrival of tens of thousands of migrant asylum-seekers, the cost of providing shelter and services has ballooned, straining the city’s budget. Officials from the Mayor’s Office of Management and Budget (OMB) estimate that it will cost the city more than $4.2 billion in the current and next fiscal years combined. 

The city has called on the federal and state governments for more aid to deal with the crisis. The federal government has, so far, only awarded the city about $8 million in FEMA funding, but separately appropriated $800 million to help cities with their migrant influx nationally. It’s unclear how much the city will receive from that pot, though OMB officials told the City Council that they don’t expect any additional federal aid in the current fiscal year, which ends June 30. 

Governor Hochul, in her budget, provided $1 billion in assistance over two years, which would include reimbursing 29% of the city’s shelter costs as the state usually does, and proposed a framework to split the costs of services evenly among the city, state, and federal governments. 

The Senate budget supports reimbursing the city for 29% of its costs even if they exceed the governor’s $1 billion proposal for the Migrant Service and Assistance program. The Assembly one-house budget merely provides $40 million for immigration legal services for migrants and asylum-seekers.

After meeting with the governor and legislators in Albany on Monday, Mayor Adams cited funding for asylum-seeker services as his top state budget priority, along with resolving the question over MTA funding without the city being required to meet the governor’s proposal.

4. Charter School Cap
Hochul wants to increase the number of charter schools in New York City, a contentious issue opposed by teachers unions and many Democratic legislators. Her proposal would eliminate the regional cap on the number of charters permitted in the city, which has been hit, and authorize unused charters to be reissued. In sum, it would allow more than 100 new charter schools in the city.

Both chambers excluded the proposal in their one-house budgets signaling an uphill battle as budget negotiations unfold. Enrollment in privately-run public charter schools has grown significantly over the last decade while traditional public school enrollment has declined. Many charter schools, which predominantly teach Black and Latino students, continue to grow as they add grade levels in expansion based on their original charter approvals.

Hochul has argued the relative demand is a reason for expansion while Heastie and Stewart-Cousins have indicated they believe those resources should be put toward traditional public schools, which account for roughly 86% of the city's public school student body.

While Mayor Adams is supportive of charter school growth in general, he said in state budget testimony that the governor’s proposed expansion of charters could cost the city $1 billion more annually in rent payments.

5. Local Medicaid Costs
Hochul's proposal includes ending a Medicaid cost-sharing arrangement between the state and counties that has been in place since 2015. The state's Medicaid program, which provides health care coverage for low-income New Yorkers, is funded by a mix of federal and state money, with the majority share falling on the federal government.

Under the governor's plan, the state would keep the full enhanced Federal Medical Assistance Percentage (eFMAP) funding to localities, which is provided under the Affordable Care Act. The proposal has been fiercely opposed by local leaders who said counties would have to cover the funding gap by raising taxes or cutting services.

Mayor Adams estimated the plan would cost New York City $343 million next fiscal year. The New York State Association of Counties estimated the change could cost counties outside New York City $280 million in the next fiscal year.

The Senate and Assembly both rejected that proposal by including $624 million to be passed back to counties and New York City to offset the state's eFMAP grab. The one-house budgets also each rejected a Hochul proposal to delay adding coverage for undocumented immigrants over 64 who were previously ineligible for Medicaid. Both houses also included coverage for income-eligible undocumented immigrants under the Essential Plan, a state-operated, federally-funded health care option for low-income residents who are ineligible for Medicaid.

6. SUNY and CUNY Tuition
Hochul's executive budget proposal of tuition increases for SUNY and CUNY received strong backlash from student advocates and some state legislators and was mostly rejected in both one-house budgets.

The executive budget includes an annual tuition increase for SUNY and CUNY students indexed to the Higher Education Price Index – a measure of inflation in higher education costs – and capped at 3% annually. It also would allow tuition to increase up to 6 percentage points annually at SUNY's four university centers with a cap at 30% over five years. According to the state Division of the Budget, the increases would raise $97 million for SUNY and $31 million for CUNY in academic year 2024 operating funds.

The Senate's response rejected Hochul's tuition hikes for SUNY and CUNY while leaving open the possibility for SUNY tuition increases for out-of-state students. The Assembly one-house budget rejected the increase for CUNY students only.

Overall, Hochul’s budget proposed a decrease in CUNY funding from the state while the legislative budgets include significant increases.

7. Tax Rates
In 2021, lawmakers raised the corporate tax rate on corporations earning over $5 million in profit from 6.5% to 7.2%. Hochul's executive budget included a three-year extension on the higher rate, which will otherwise sunset at the end of this year.

The Senate and Assembly one-house budgets both include the three-year extension but rejected an additional payroll tax to fund the MTA. Instead, each house proposed covering that additional revenue through an increase in the corporate tax rate downstate. In the Senate's case that came by increasing the MTA surcharge – a boost in the corporate tax rate for businesses in downstate counties served by commuter rail.

Both one-house budgets also included personal income tax increases for the highest earners, raising the rates half a percentage point for filers making between $5 million and $25 million annually and for people making over $25 million. Hochul's proposal would keep income taxes flat, and the governor has vowed not to raise income taxes this year. Meanwhile, many lawmakers and advocates want to go well beyond the tax increases in the legislative proposals to raise billions more to fund social services.

8. Minimum Wage
Senate and Assembly Democrats are upping the ante on Hochul's proposal to tie New York's minimum wage to inflation, arguing the base wage must first be raised in order to help low-wage workers keep up with rising prices. The minimum wage is now $15 an hour in New York City, Long Island, and Westchester and nearing it elsewhere in the state ($14.20) as the gradual phase-in to $15 passed in 2016 nears completion.

Hochul's executive budget included a cap on annual minimum wage increases at the lower of 3% or the increase in the Northeast Consumer Price Index rate, which measures inflation. It also includes exceptions in the case of certain economic downturns.

The one-house budgets did not specify an exact amount for base wages to increase before being indexed to inflation. Legislation introduced in the Senate and Assembly would raise the minimum wage in New York City and parts of Long Island to $21.25 an hour by 2026 and to $20 an hour in the rest of the state, with increases pegged to inflation thereafter.

9. Funding for Prosecutors and Public Defenders
In her budget, Hochul proposed $52 million in “aid to prosecution” funding, a nearly $40 million increase, to help the state’s 62 counties hire more prosecutors and bolster their offices as they deal with the mandates of recent state criminal justice changes including discovery and speedy trial reforms.

The governor’s budget would also continue a $40 million annual allocation for prosecutors in counties outside New York City to comply with the discovery reform law that went into effect in 2020. Additionally, the state would provide $7 million to DAs that establish specialized units dealing with the opioid overdose crisis. 

Public defenders, however, have argued that they also need a commensurate boost in resources as they too contend with the new criminal discovery laws. Public defender organizations are already struggling with staffing crises as their caseloads have increased, leading to further case delays and increasing the backlog in criminal courts. 

[Read: As Prosecutors Get Budget Boost, Public Defenders Seek More Funding Too]

Hochul’s budget for the state Office of Indigent Legal Services, which aids counties and indigent legal service providers, remains flat at $359 million for the next fiscal year. She also allocated $7.6 million for “aid to defense” programs for indigent service providers like the Legal Aid Society, an amount that is also unchanged from the current fiscal year. The budget did propose increased pay rates for “18-b attorneys” under the state’s Assigned Counsel Program. 

The Senate’s one-house budget includes $47 million to support criminal defender services and another $40 million for “Discovery Reform Criminal Defenders,” and adds $35 million in funding for the Office of Indigent Legal Services, among other measures raising pay rates for assigned counsel attorneys. 

The Assembly’s proposed budget sets the Office of Indigent Legal Services budget at $564 million, an increase of $198 million over the governor’s proposal. It also adds $100 million to help public defenders comply with the criminal discovery law, and an additional $60 million for prosecutors on top of the $40 million that the governor proposed, for $100 million total.

10. Bail Reform
After the State Legislature approved sweeping reforms to the state’s bail system and then revised and tightened them twice, including last year, Hochul is pushing for another amendment this year. It is again among the most controversial elements of budget negotiations, with her calls for more pretrial incarceration met with opposition by many legislators and criminal justice reformers. 

Hochul seeks to eliminate the “least restrictive means” standard that judges are required to use when setting bail. She has insisted that it is necessary to clear up contradictions in the law – in part a result of changes she saw through last year – and would apply to violent felonies, high-level misdemeanors, and repeat offenders. Hochul demonstrated last year that she is willing to delay the budget if the state Legislature doesn’t approve her demands on bail law changes, potentially setting up another face off this year.  

Hochul has the support of some moderate and conservative Democrats, including most prominently Mayor Adams, as well as Republicans who are pushing for even greater amendments to the bail law. In particular, Adams and others have called for instituting a “dangerousness” standard that judges can use while deciding to set bail or remand a defendant to custody. 

As expected, Democrats in both houses of the Legislature rejected Hochul’s idea and it was not included in their one-house budgets.

11. Alternatives to Incarceration and Re-entry Services
Hochul included $31.4 million for funding alternatives to incarceration in her executive budget, double the funding in the enacted budget for this fiscal year.

The executive budget also includes $7.7 million in new funding for reentry services, which would bring total funding to $11.5 million.

The Senate's one-house budget added to Hochul's proposal an additional $10 million for "criminal and civil legal services, alternatives to incarceration, community supervision and re-entry initiatives." The Senate budget also adds $1 million from the federal Justice Assistance  Grant appropriation to violence, crime, and drug prevention and alternatives to incarceration. The Assembly's one-house budget adds $5.2 million for alternatives to incarceration, which can include community supervision and employment-based programs.

Some state legislators are pushing for the inclusion in the state budget of the Treatment Not Jails Act, which would expand mental health treatment courts statewide. It was not included in the one-house budget resolutions, but elements of it could make their way into a budget deal.

[Read: State Legislators Push 'Treatment Not Jails Act' to Avoid Incarceration for Many with Mental Illness]

12. Hochul's Housing Plan
“Housing Compact” to build 800,000 homes over a decade to meet the state’s desperate need for housing. Her plan involves a broad mix of policies including mandatory local and regional targets for housing production, amendments to state zoning rules, tax credits, infrastructure and planning funding, and more.  

One of the measures she proposed would create processes to override localities when they either fail or refuse to meet targets for housing creation. It has prompted heated opposition, particularly from suburban lawmakers who believe the state is attempting to supersede local control of land use decisions.

There are several other proposals in her housing plan including required rezoning for higher density around all MTA subway and rail stations, eliminating the Floor-Area-Ratio (FAR) cap in New York City that limits apartment building density, expanding commercial conversions to housing and incentivizing it with a new tax credit, expanding a property tax exemption for Accessory Dwelling Units (ADUs), allowing New York City to legalize basement apartments, a new local property tax exemption for multifamily affordable housing, and more. 

Hochul did not, however, propose a new affordable housing tax abatement to replace the expired 421-a program, after floating and then later abandoning an alternative program called 485-w last year. But she does want to see a new version of such a program agreed to in the new budget, or at the least, for now, support for her proposed extension of the construction deadline for buildings to receive 421-a credits, from completion in 2026 to 2030, which would apply to tens of thousands of potential apartments.

Both the Senate and Assembly, in their budgets, rejected the governor’s proposed mandatory housing growth targets and zoning override proposal, though they did both include the growth targets and leaders have said they are open to negotiations on many details around housing.

The Senate proposed $500 million in annual state infrastructure funding incentives to encourage housing creation. The Assembly proposed the same amount for municipalities outside New York City and $125 million separately for New York City.

13. Good Cause Eviction and Housing Access Vouchers
Two top priorities for housing and tenant advocates this year are the so-called “good cause eviction” bill and the Housing Access Voucher Program (HAVP). 

Good cause eviction would protect tenants against exorbitant rent increases as well as prohibit evictions in most cases unless tenants violate a lease agreement. Hochul has not taken a firm position on the legislation, but has noted that it is not part of her agenda.

The Senate’s one-house budget expresses support for “advancing tenant protections that align with the core principles of Good Cause Eviction.” The Assembly, on the other hand, does not mention it but does add $15 million for an expansion of statewide eviction prevention legal services, for a total of $50 million.

The HAVP would create a $250 million statewide program for those experiencing homelessness or at risk of eviction to pay rent via vouchers. The measure passed the Assembly housing committee in February, and both chambers funded it in their one-house budgets. 

Last year, Hochul opposed a new housing voucher program, though her resistance to it was reportedly based on an inflated projection of its cost – roughly $6 billion annually – that did not match lawmakers’ demands.

14. NYCHA
Though the New York City Housing Authority has a $40 billion five-year capital need, its focus this year has shifted to its struggles with its operating budget because of plummeting rent revenue. 

The governor’s budget proposal included no new capital or operating funds for NYCHA, even as lawmakers and housing advocates are pushing for increased assistance to cover rental arrears for tenants.

[Read: NYCHA Rent Arrears Crisis Shifts Budget Focus from Capital Needs to Operating Assistance]

[Read: NYCHA Officials Sound The Alarm at City Council Budget Hearing]

In total, NYCHA has tenant rent arrears of about $466 million from 73,000 households, up from $125 million in 2019. The authority has applied for $120 million in rental assistance for more than 31,300 households under the Emergency Rental Assistance Program (ERAP), a state program created during the pandemic using federal aid. But none of those payments have been approved since NYCHA tenants were placed at the bottom of the priority list for the program, and arrears for those tenants have grown to $240 million. ERAP funding has since been depleted. 

NYCHA has asked for about $330 million from the state to help cover its rent arrears and to avoid fiscal crisis as it continues to dip into reserves to cover expected annual operating deficits.

The Senate’s one-house budget proposes adding the $389 million for ERAP, as well as another $350 million in capital funds for NYCHA in the coming fiscal year. The Assembly’s budget also proposes $385 million for statewide rental arrears assistance. It’s unclear how much of that amount would be earmarked for NYCHA tenants.

15. Cap-and-Invest
As part of her State of the State agenda, Hochul proposed a cap-and-invest program that would place a tax on carbon emissions from large polluters and fuel sellers. The executive budget estimates the corresponding Climate Action Fund will generate $1 billion annually from the tax, which would be used by the state to pay for energy rebates to consumers and businesses, and decarbonization efforts.

The Senate included the program in its one-house budget with more guidelines and guardrails for how the proceeds can be spent. The Assembly one-house budget did not include cap and invest language.

16. Gas Bans and Renewable Energy
Hochul added $5.5 billion for climate action in the executive budget bringing total spending to over $30 billion. That includes spending on energy affordability, emissions reductions, and clean air and water.

The capital plan includes financing $805 million over five years under the Environmental Bond Act, which voters approved last fall to authorize state borrowing up to $4.2 billion for environmental projects. That includes $100 million in fiscal year 2024.

[Read: How New York Will Implement the $4.2 Billion Environmental Bond Act Passed by Voters in 2022]

Hochul also proposed a ban on fossil fuel hook-ups in newly-constructed buildings starting in 2025 for some buildings and a plan to phase out the sale of heating equipment that burns fossil fuels. Both the Senate and Assembly one-house budgets included the ban on gas in new construction (with differences in the phase-in dates and other secondary changes), giving environmental advocates hope that the three parties will reach a deal in the final budget.

Both houses also included a measure to decarbonize state-owned buildings, including SUNY campuses, by 2040 – a proposal left out of the executive budget.

One point of division between the governor and State Legislature is the Build Public Renewables Act, which would require the New York Power Authority to build renewable energy power and phase out fossil fuel burning plants, along with certain labor standards for renewable projects. Hochul proposed a pared down version of the bill in her executive budget: it allows but does not require the NYPA to build renewable energy plants and leaves out some of the labor provisions included in the legislation.

The Senate's one-house budget includes the full Build Public Renewables Act, which the chamber passed last year and again this year. The Assembly has not passed the bill and did not include language around the New York Power Authority in its one-house budget.

The Senate's one-house budget includes a $500 million increase to the Environmental Protection Fund, while the Assembly added $435 million. Both houses added $100 million on top of the governor's $500 million proposed funding for the Clean Water Infrastructure Act, along with water quality measures in Suffolk County.

The Senate also included the Waste Reduction & Recycling Act, a measure proposed in Hochul's executive budget that would hold companies responsible for the environmental impact of the packaging they use. The Assembly did not include the bill but accepted the governor's proposed Department of Environmental Conservation budget, which includes staffing to support the program.

17. State Public Campaign Finance System
The Public Campaign Finance Board requested $14.5 million for administration and infrastructure to run the new state campaign finance system that includes public matching for small-dollar campaign donations; and $100 million for the matching funds pot.

Hochul's executive budget included $14.5 million to launch the new office and $25 million for matching funds, building on $10 million Hochul and the Legislature included in last year's budget. The PCFB and Hochul have said public matching payments are not expected to be made until the following fiscal year, which begins April 1, 2024, when that year's primaries for state legislative seats will be well underway.

State lawmakers approved the program in 2020, setting lower contribution limits and creating a public small-dollar match option for candidates running after the 2022 election cycle for statewide and state legislative seats. The new system is modeled on New York City's campaign finance system, which supporters say helps reduce the influence of large donors on elections.

In February, Spectrum News reported legislators were discussing delaying the start of the public matching program for two years over concerns about being able to fully fund the program. The Senate and Assembly one-house budgets included the governor's full proposal without new start dates.

[Read: Hochul’s Budget Offers Far Less Funding Than Requested by New State Public Campaign Finance Board]

18. Film and Television Tax Credits
Hochul's proposal to increase New York State's Film Tax Credit appears to have the support of the Senate and Assembly, which included the provision in their one-house budgets.

The credit is one of New York's largest industry subsidies. It currently offers a 25% credit of eligible production costs for movies and TV shows made in New York, running roughly $420 million a year. Hochul and legislative leaders want to up that subsidy to 30%, which would total roughly $700 million annually. Hochul is also seeking to expand the types of production costs that would be eligible for the tax credit, a proposal included in the Assembly's one-house budget but rejected in the Senate's.

The proposal is one of several major industry subsidies that Hochul is pushing – now with the backing of the two legislative majorities. That also includes expanding a tax credit for Broadway theaters from $200 million a year to $300 million. The Musical and Theatrical Production Tax Credit was created during the height of the pandemic to help struggling theaters cope with massive revenue losses that came from closing their doors. The Assembly and Senate each included the increase in their budget proposals, with the Senate extending the credit to off-Broadway theaters as well.

19. Belmont Racetrack Loan
Hochul and the Legislature appear to be aligned on a proposal to lend $455 million to the New York Racing Association to demolish and rebuild facilities at Belmont Park, an aging horse racing facility on Long Island. Both the Senate and Assembly one-house budgets included the funding, which Hochul proposed in her executive budget earlier this year.

The deal requires the New York Racing Association, the nonprofit operator of Belmont, to give up its lease for the state land on which nearby Aqueduct Racetrack sits in Queens, once the reconstruction is completed. In the process, horse racing at Aqueduct, which is also operated by the racing association, would be moved to Belmont and Aqueduct torn down, freeing up 100 acres of state-owned land adjacent to JFK International Airport, which some want to use for housing.

While some critics and watchdogs question investment in the declining horse racing industry and risk for New York taxpayers and using tax dollars to subsidize animal cruelty, proponents including the governor insist the plan would attract more economic activity, including tourism, to the area and open up opportunities to redevelop the valuable land under Aqueduct.

20. Cigarette Tax and Flavor Bans
In her State of the State agenda and executive budget, Hochul proposed increasing the state tax on cigarettes by a dollar a pack to $5.35 per pack, and banning flavored tobacco products, including menthol cigarettes.

The Senate and Assembly one-house budgets accepted the tax hike but omitted Hochul's flavor ban, which has become the subject of fierce lobbying by anti-tobacco groups, the tobacco industry, and some Black leaders on both sides of the debate.

The Senate also included a proposal of Hochul's to impose additional penalties on cigarette retailers that refuse Department of Tax and Finance inspections.

Still Other Issues to Watch:
There are a number of other areas where there seems to be space between the governor's proposals and the Senate and Assembly's one-house budgets, or negotiations in motion to make changes.

Changes to Marijuana Law: Just last week, Hochul proposed increasing civil and tax penalties for illegal marijuana sales as well as stronger enforcement powers for the Office of Cannabis Management and the Department of Taxation and Finance to shut down stores that sell marijuana without a license. State Senator Liz Krueger, who sponsored marijuana legalization in her chamber, recently told Gotham Gazette that three-way negotiations among the governor’s office, Senate, and Assembly were underway to add several enforcement mechanisms to the law.

Assembly Majority Leader Crystal Peoples-Stokes, the Assembly sponsor of marijuana legalization, and State Senator Jeremy Cooney have separately proposed changes to simplify how marijuana sales are taxed in the state.

Clean Slate Act: Criminal justice reformers are pushing for the passage of the Clean Slate Act, which would automatically seal conviction records, except for sexual offenses, for New Yorkers once they become eligible after time served and parole periods. The bill passed the Senate last year but failed in the Assembly, and this year the Senate included it in its one-house budget but the Assembly did not. Hochul has not supported it.

Universal Free School Meals: Legislators and advocates are pushing for about $280 million in state budget funding for universal free school meals across New York, where all students would be able to eat breakfast and lunch at their schools every day.

Freelancer Protections: After Governor Hochul issued an end-of-year veto of the Legislature’s attempt to expand protections for freelance workers, lawmakers reintroduced the “Freelance Isn’t Free Act” bill this year and hope to include it in the budget. The bill, modeled after successful legislation in New York City, would give freelance workers wage protections, including a right to contracts for their work, timely payments and a grievance redressal process.

When Hochul vetoed it, she said it would place an undue financial burden on the state Department of Labor to enforce, lending impetus for it to become part of budget negotiations.

[READ: After Hochul’s 2022 Veto, Lawmakers Reintroduce Bill to Protect Freelance Workers Statewide]

Farmer Tax Credits: Last year, the state expanded an investment tax credit for purchasing or upgrading farm equipment, and, in her budget this year, Hochul proposed making the credit refundable for five years. Both the Senate and Assembly have come out in support of that proposal. 

Cost of Living Adjustment: Hochul proposed a 2.5% cost of living increase for human services workers, lower than the 8.5% increase sought by behavioral health advocates and included in the Senate and Assembly one-house budgets.

Unemployment Bridge Program: Immigrant advocates and some Democratic lawmakers and labor unions are pushing for the inclusion of a $500 million "unemployment bridge program" that would provide unemployment benefits to undocumented New Yorkers. The proposal was not included in the executive or one-house budgets but the Senate's resolution includes a review of options to expand traditional unemployment benefits.

Access to Representation Act: Immigrant advocates and lawmakers are also calling for the passage of the Access to Representation Act, which would provide the right to counsel in immigration court proceedings. 

Increased penalties for attacks on retail workers: Amid the ongoing spike in retail theft, legislators have sponsored a bill that would make it a Class D felony and bail-eligible offense to attack a retail worker – the same level as an assault on a police officer or firefighter, for instance.

They have also sponsored measures to crack down on the online sale of stolen goods and to increase penalties for repeat shoplifting. 

Adams’ proposed tax credit expansion: Mayor Eric Adams last week rallied with labor unions to push for a further expansion of the Earned Income Tax Credit and Child Tax Credit, after successfully urging the state to expand both last year. Under a proposed state bill, those with Individual Taxpayer Identification Numbers (ITIN) would be eligible for the credits, instead of the current eligibility for just people with Social Security numbers.

Working Families Tax Credit: Some lawmakers are also seeking a Working Families Tax Credit, which would provide families $500 per child and up to $1,500 for low-income households. Hochul's budget did not include the credit while Senate and Assembly one-house budgets included some elements of the proposed legislation.

Comptroller Oversight: Hochul's executive budget would exempt $12.8 billion from competitive bidding and comptroller oversight. State Comptroller Thomas DiNapoli said the provisions would harm the integrity of state procurement.

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

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

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Note - this article has been updated. 

Max Politics Podcast: Senator Liz Krueger on State Budget Negotiations


State Senator Liz Krueger, center-right, with other state leaders (photo: NYS Senate)


March 20, 2023 - Max Politics Podcast: Senator Liz Krueger on State Budget Negotiations

State Senator Liz Krueger, chair of the Senate finance committee, joined the show to discuss state budget negotiations with under two weeks before the April 1 deadline for a new spending plan.

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 Liz Krueger on State Budget Negotiations

As Psychiatric Beds are Brought Back into Service Slowly, Officials Point to Workforce Shortage


Gov. Hochul visits a hospital (photo: Kevin P. Coughlin/Governor's Office)


Hospital administrators and state regulators say a severe workforce shortage has stymied efforts to restore a majority of the 1,050 inpatient psychiatric beds removed across the state during the height of the pandemic in 2020.

Three years later, over 600 beds remain offline, according to the New York State Office of Mental Health (OMH), despite a $55 million infusion in last year's state budget and another $9 million to support the staffing pipeline.

The beds have become a focal point for Governor Kathy Hochul and Mayor Eric Adams, Democrats who have centered a continuum of mental health care and public safety services in their first-term agendas. The two have called for hospitals to increase their capacity to commit patients with serious mental illnesses on short- and medium-term stays, a complement to the 3,300 beds in state-operated psychiatric institutions.

The $55 million allocation, a combination of state and federal funds, supported higher Medicaid rates for inpatient psychiatric beds, bringing them closer to medical and surgical bed rates. That money has already been spent while the state awaits retroactive approval from the federal government, according to James Plastiras, an OMH spokesperson.

Even with the higher reimbursement rates, hospitals continue to struggle with adequate staffing, making it impossible to predict when the remaining 636 beds will come back into service. There are 5,780 inpatient psychiatric beds in health care facilities statewide; in total, the remaining beds would increase New York's capacity 11%.

"That money was intended to get psychiatric rates closer to paying for the cost of care, but the cost of care has become more expensive because of the workforce shortages," said Alison Burke, the Vice President of Regulatory and Professional Affairs at Greater New York Hospital Association, which represents roughly 280 hospitals and healthcare facilities in the region (including New York, New Jersey, Connecticut, and Rhode Island). "Getting staff costs more money now," she said.

Part of that cost spike is the result of recent contract negotiations with the New York State Nurses Association, Burke told Gotham Gazette, and ongoing negotiations with 1199SEIU, the state's largest healthcare workers union. But the biggest underlying problem is a labor shortage that was years in the making and compounded by the intensity and exhaustion of work on the frontlines of a pandemic.

"The workforce challenge is, I would say, the biggest obstacle to getting all of the beds and all of the necessary services back up and running right now," Burke said. "We could have a million beds back online, sheets ready, but we don't have the staff."

The bottleneck could pose an obstacle to Hochul and Adams as they attempt to deliver on key planks of their agenda. In October, the mayor, governor, and top city and state brass gathered at Grand Central Terminal to announce "Cops, Cameras, and Care," a campaign to make subways safer by pouring police, surveillance cameras, and mental health clinicians into the system. A month later, Adams announced a plan to step up the removal of people with severe mental illness from the subway, and expressed a desire for hospitals to increase the number of involuntary psychiatric commitments.

"You can remove people, but you also have to make sure that they get the treatment they need so they don't come back," Hochul said at the October 22 press conference, referring to inpatient beds.

"We need beds. There's no getting around that. We need beds," Adams told reporters in November. The extent of that need is still unclear: in 2022, police involuntarily removed at least 1,300 individuals from the subway, but officials have not said how many were ultimately admitted to a hospital or even met the clinical criteria for admission.

Current Plans
Hospitals have been on something of a spree in recent months, reinstating 214 beds since last fall, when Gotham Gazette reported 850 of the 1,050 beds remained offline after months of no progress. Of those newly restored beds, 70 were in New York City, including 33 at NYC Health + Hospitals (H+H), the city's public hospital network, according to OMH.

OMH would not give an estimate of when the full tally of offline beds would be restored. According to Plastiras, 80-90 more beds are expected online by April. Officials with H+H said the system intends to add 200 more inpatient psychiatric beds across the five boroughs by December.

H+H accounted for roughly a quarter of the shuttered beds statewide, Gotham Gazette has learned. At one point in 2020, the hospital system was among the most strained in the world due to COVID-19, converting any available space to intensive and emergency care. At the height of the pandemic, H+H facilities had between 250 and 260 psychiatric beds offline, according to OMH. H+H has never provided information on the number of psychiatric beds taken offline at the height of the pandemic, despite dozens of inquiries over several months.

"We are making large investments and working tirelessly on bringing these behavioral health beds online as fast as staffing and space configurations allow," wrote H+H spokesperson Stephanie Buhle in an email to Gotham Gazette. H+H has just over 1,000 beds online currently, she wrote, along with a range of outpatient and telehealth programs.

The Adams administration would not comment on the capital or operational needs involved in restoring beds, including how many staff H+H needs to hire. But at a City Council budget hearing on Tuesday, March 21, H+H CFO John Ulberg testified that the beds would cost between $650 and 700 million, and President and CEO Dr. Mitchell Katz said it would require a staffing ratio of seven nurses and 15 ancillary staff per bed.

Seventy-nine percent of H+H existing beds are occupied, Katz said.

Last year, Hochul included $9 million in the state budget for tuition assistance for psychiatrists and psychiatric nurse practitioners. That money is being spent on a rolling basis, and hospital administrators are seeking additional funds in this year's state budget, including funding for recruitment and retention efforts for social workers and other licensed mental health providers.

Outside of traditional hospitals, known as Article 28 facilities, Hochul's executive budget proposal for next state fiscal year, which begins April 1, includes $48 million for 150 new adult beds in state-operated psychiatric facilities, including 100 in New York City. These are in addition to 50 state-operated beds opened last fall in downstate psychiatric hospitals and separate from the effort to restore Article 28 beds.

Penalties for Hospitals
This year, Hochul is seeking legislation that would allow the state to fine hospitals $2,000 a day for failing to comply with the number of psychiatric beds outlined in their operating certificates.

"This legislation is necessary to implement the FY 2024 Executive Budget because it would support the re-opening of Article 28 inpatient psychiatric beds and provide $500,000 in revenue in FY 2024," reads a state memorandum of support provided by OMH.

Plastiras, the OMH spokesperson, would not say how many hospitals are operating below their mandated capacity but told Gotham Gazette the state was in touch with delinquent facilities about getting beds back online. Hochul’s executive budget is now the subject of negotiations with the two houses of the State Legislature, with a new state budget due by April 1.

"Bed counts are very fluid, and inpatient psychiatric and medical beds in hospitals may go offline for short periods of time for a variety of reasons, including construction, staffing shortages, etc.," Plastiras wrote by email. "The Article 28 facilities we contacted regarding offline beds have all submitted plans to return those beds to psychiatric use."

On January 10, the same day Hochul announced the proposed sanctions in her State of the State agenda, OMH and the state Department of Health issued a letter to hospital administrators with an ultimatum: they had until February 10 to restore all non-operational psychiatric beds or submit a plan to do so by April 1.

Hospitals appear poised to miss that mark. Plans submitted by providers indicate only 80-90 beds will come online statewide by April, according to figures provided by OMH after a Gotham Gazette inquiry. That would leave around 550 of the 1,050 psychiatrist beds yet to be restored.

The state letter threatens fines and other enforcement actions. Asked how the state planned to handle errant hospitals, Plastiras said the plans were still under assessment.

"We understand that healthcare providers are facing difficult issues, not the least of which is a nationwide shortage of healthcare workers," he wrote, noting the state's investment in the psychiatric workforce.

"Moving forward, OMH is working with hospitals to identify additional supports and resources that may be needed to reopen beds," Plastiras wrote. "To ensure that reopening plans are on-track, OMH will expand our monitoring of inpatient programs, particularly those with offline beds. If necessary, we will impose fines and sanctions on hospitals not working in good faith to reopen offline beds."

In a response letter, GNYHA President Kenneth Raske blamed bed levels on a shallow labor pool and continuously-low Medicaid reimbursement rates.

He wrote the boost in last year's budget accounted for a 20% increase in reimbursement rates but still left hospitals to find other sources to cover 45% of costs. It also only applies to patients covered under a type of Medicaid plan known as fee-for-service. But for much of the last decade, most Medicaid recipients have been moved over to a new system known as Managed Care. That leaves only one in five discharges benefiting from Hochul's rate increase.

The Assembly's one-house budget proposal rejects the increased penalty entirely, while the Senate's included it with additional protections for "attempts made in good faith to comply with applicable operating certificates and the law."

Asked about the proposal, Burke of GNYHA said hospitals are in regular communication with OMH and there are no indications the state is planning to issue fines. "These patients are in our emergency rooms if they're not in an inpatient bed when they require hospitalization. So everybody recognizes the need right now well exceeds the capacity, and people are making every effort to get the beds back online. And we all support that."

"We don't support our members getting fined," she added.

Note: This piece was updated with information provided by New York City Health + Hospitals at a City Council preliminary budget hearing on Tuesday, March 21.

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

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Max Politics Podcast: Ed Cox Returns as New York Republican Party Chair


Ed Cox on Capitol Tonight


March 14, 2023 - Max Politics Podcast: Ed Cox Returns as New York Republican Party Chair

Newly-elected New York State Republican Party Chair Ed Cox, who previously held the role for 10 years (2009-2019), joined the show to discuss his plans for leading the state party, how to protect and build on Republican successes in 2022, 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: Ed Cox Returns as New York Republican Party Chair

State Legislators Push 'Treatment Not Jails Act' to Avoid Incarceration for Many with Mental Illness


Treatment could be available for more defendants (photo: Michael Appleton/Mayor's Office)


State legislation to expand alternatives to incarceration for people with mental illness is gaining momentum in Albany amid debates over how criminal justice, public safety, and mental health care policy interact.

The Treatment Not Jails Act would require judicial diversion courts in every county of the state and expand the list of special circumstances that qualify a defendant to have their case heard outside a conventional criminal courtroom. Its sponsors say the program would offer a critical alternative to the traditional system of crime and punishment for people with serious mental health care needs, intellectual disabilities, and a host of other clinically defined "functional impairments." 

The legislation has seen growing support in the State Legislature, where its sponsors are pushing for it to be included in their chambers’ one-house budget proposals due out the week of March 13. Governor Kathy Hochul has not taken a position on the bill as budget negotiations enter the final stages — a state budget is due by the April 1 start of the new fiscal year.

The debate over treatment courts comes at a time when jails and prisons, which house a disproportionate number of people with mental health needs, are seeing record violence and death.

Supporters argue the alternative court settings – which offer court-ordered treatment and supervision in lieu of incarceration – provide a safer and more constructive path to rehabilitation than jails. Opponents say the legislation is another progressive measure, like recent discovery law reforms, that could sap resources and hurt public safety. 

"On the face of it all, it's easy to go back to that knee-jerk reaction of, 'Oh, it sounds like this is a get-out-of-jail-free card.' And it's not," said State Senator Jessica Ramos, a Queens Democrat and the bill's lead Senate sponsor, in an interview with Gotham Gazette. "It is actually making sure that folks are being seen by the court with the medical lens that their mental illness requires."

The bill has gained co-sponsors each legislative session since it was first introduced in 2020. It now has the official support of roughly a third of each legislative chamber, including both Democrats and at least one Republican in each house.

Spokespeople for Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie, both Democrats, did not return requests for comment on the legislation or the likelihood of it being included in one-house budget bills.

Court-mandated mental health treatment and involuntary psychiatric commitment have become a growing interest of city and state leaders, including Hochul and Mayor Eric Adams, two Democrats who have centered related policies in their public safety agendas.

Adams has put in motion an increase in involuntary removals of homeless New Yorkers with untreated severe mental illness from the streets and subways.

"We can no longer deny the reality that untreated psychosis can be a cruel and all-consuming condition that often requires involuntary intervention, supervised medical treatment and long-term care," he said when announcing the new policy in November.

He also advocated for the successful state-level expansion of Kendra's Law last year, which allows court-order treatment in civil cases where a person is deemed a danger to themselves or others.

A spokesperson for Adams said the Treatment Not Jails Act was under review.

"Mental health courts have an important role to play in our criminal justice system, strengthening public safety and ensuring that people get the treatment and support they need to maintain stability," the spokesperson wrote by email.

Each of the five boroughs currently has a mental health treatment court for a narrower population than is included in the Treatment Not Jails Act.

A spokesperson for Hochul said she would look at the legislation if it passed both houses.

New York has 233 special treatment courts for veterans, people with substance abuse disorder, families with a history of domestic violence, and people with mental health care needs, among others. The courts, which exist on an ad hoc basis throughout the state, require mandated treatment plans that could include counseling and medication along with other services like housing (the Office of Court Administration could not provide a breakdown of the courts' distribution across the state). Mental health courts often require a guilty plea before a defendant may become eligible for diversion from potential incarceration, according to the bill's sponsors.

The Treatment Not Jails Act would require each county to open up a treatment court and make any individual accused of a felony or misdemeanor eligible for consideration. The bill would require a clinical evaluation by a mental health professional to determine eligibility before a plea is made. The evaluation is shared with the defendant and their lawyer who may agree to share it with prosecutors and the court. To be diverted, the prosecution and defense must then come to an agreement based on the evaluation; otherwise either party may seek a hearing before a judge.

Prosecutors reached for comment said they support the spirit of expanding access to mental health treatment courts but indicated they were unsatisfied with the current language of the bill. 

"The Office supports the goals of the bill and will be meeting with advocates and legislators in the coming weeks to discuss specific aspects of its language," wrote Emily Tuttle, a spokesperson and senior advisor to Manhattan District Attorney Alvin Bragg, in an email to Gotham Gazette. Shortly after taking office, Bragg opened a new division focused on special courts and alternatives to incarceration. His office declined to provide specifics about its concerns with the current bill language.

“We are deeply committed to increasing access to mental health treatment, and Brooklyn’s nationally recognized Mental Health Court has continually expanded the cases it accepts," reads a statement from Brooklyn District Attorney Eric Gonzalez's office in response to a Gotham Gazette inquiry. "We are working with the bill’s sponsors to prevent the serious unintended consequences that would arise if the legislation is enacted in its current form.”

The office did not provide details on what those unintended consequences could be.

An official familiar with treatment courts who requested not to be named because they were not authorized to speak on the record warned that the courts do not have the resources to conduct hearings and evaluations for the wider population that would become eligible for diversion under the bill. The official said the bill could result in unmanageable delays that might reduce the number of people who end up receiving mental health treatment.

A spokesperson for Queens District Attorney Melinda Katz said the office was analyzing the latest version of the legislation.

Public defenders have organized in support of the Treatment Not Jails Act. “Too often, our incarcerated clients with mental health and substance abuse issues languish in jail, denied treatment and cycled through the revolving door of Rikers Island,” said Alice Fontier, managing director at the Neighborhood Defender Service of Harlem, in a recent statement.

Prosecutors say they are still struggling to meet the demands of 2019 changes made to the state's discovery laws that tightened deadlines to turn over evidence to defense attorneys. Hochul has proposed more funding for that purpose in her executive budget.

"District Attorney’s offices spent a great deal of time establishing new mechanisms for discovery storage and exchange. Funding continues to be needed for additional staff and particularized staff training, new and updated technology, and expanded storage capabilities," the District Attorneys Association of the State of New York testified at a recent legislative budget hearing.

The state's 95 existing Adult Drug Treatment Courts will cost taxpayers $16 million in the next fiscal year, $15.2 million of which will pay for non-judicial court personnel with the remainder going towards training and drug testing, according to court spokesperson Lucian Chalfen.

The bill's sponsors estimate the Treatment Not Jails Act will cost the state roughly $15 million annually and argue it will ultimately save the state much more money by avoiding the cost of imprisonment. The Office of Court Administration, which runs the state court system, does not yet have a position on the bill, Chalfen said.

While Hochul has not opined on the legislation, her inclusion of an additional $15.7 million for alternatives to incarceration in her executive budget this year has given lawmakers hope.

"That is exactly the number for Treatment Not Jails," said Assemblymember Phara Souffrant Forrest, the Assembly's prime sponsor of the Treatment Not Jails Act, in an interview with Gotham Gazette. "That was very positive for us." The Assemblymember’s office will be meeting with the governor's team next week to discuss getting the bill into the final budget, she said.

Last year, Hochul and the Legislature allocated $15.7 million for alternatives to incarceration, ultimately awarding $17.1 million through the Department of Criminal Justice Services (DCJS), according to Janine Kava, a spokesperson for the governor's office and DCJS. The funding went toward pretrial release programs, employment-based services, and jail based "cognitive behavioral intervention," aimed at reducing recidivism upon release. Another $400,000 of that original allocation went to the state correction department, Kava said. In her executive budget for the fiscal year that begins April 1 of this year, Hochul doubled alternatives to incarceration spending to $31.4 million.

The governor and legislative leaders will negotiate the budget over the coming weeks, discussions that will intensify after the two houses pass their individual budget resolutions in the near future.

The newly-funded programs are yet to be determined, "but DCJS will build on what has worked well and ensure that programs are evidence-based and proven to work," Kava wrote in an email. "Governor Hochul will review the legislation if it passes both houses," she said of the Treatment Not Jails Act.

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

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NYCHA Rent Arrears Crisis Shifts Budget Focus from Capital Needs to Operating Assistance


Governor Hochul makes a NYCHA announcement (photo: Governor's Office)


After decades of neglect and underinvestment at every level of government, the New York City Housing Authority (NYCHA) continues to struggle to fund its annual operating expenses and massive infrastructure repair needs.

While the city and state have made some recent investments in the public housing authority’s capital infrastructure needs, the pandemic blew a hole in its operating budget as rent revenue plummeted and its roughly 500,000 residents were last in line for the state’s rental assistance program. To the tune of $454 million, the major rent arrears issue that developed has created annual deficits forcing NYCHA to dip into reserves and putting it in particularly precarious financial position.

Now, as the annual state and city budget processes unfold, NYCHA residents, housing advocates, and like-minded legislators are pushing for a new $2 billion eviction prevention fund for residents of public housing and affordable housing development with city and state regulatory agreements.

This year presents a marked shift away from a focus on the authority’s capital needs given recent movement on that front and the emergency that has grown around unpaid rent. Notably, after the current state budget included a number of important NYCHA-related measures, Governor Kathy Hochul’s executive budget for next fiscal year, which begins April 1, does not include new operational or capital support for NYCHA.

“Governor Hochul's Executive Budget makes transformative investments to make New York more affordable, more livable and safer, and she looks forward to working with the legislature on a final budget that meets the needs of all New Yorkers,” said a spokesperson for the governor, in a statement in response to the governor’s lack of NYCHA-related proposals in her budget and policy agenda.

Focus on Capital Repairs
As of 2020, NYCHA had a roughly $40 billion, five-year capital need for repairs, maintenance, and upgrades, with those costs expected to rise by $1 billion annually. That year, NYCHA released “A Blueprint for Change” that was meant to put the authority on a path toward reaching a significant percentage of its capital needs, stabilize its overall finances, and reform its management after years of crises. 

The transformation plan has since been put into motion and the city has made major strides to fund infrastructure improvements at NYCHA’s 175,000 apartments. Repairs at about 62,000 apartments are being achieved under the Permanent Affordability Commitment Together (PACT) program, which places developments under private management and makes them eligible for federal funds through the Rental Assistance Demonstration (RAD) program.

The remaining roughly 110,000 units required $18 billion in repairs – at the time that the blueprint was published, NYCHA had about $3.3 billion in capital towards that goal. The agency also estimated that another $7 billion would be needed for improvements to grounds, community centers, and more.  

Mayor Eric Adams won significant victories in last year’s state budget to fund NYCHA’s infrastructure. Governor Kathy Hochul launched a five-year housing plan that included $350 million in capital funding for NYCHA. That budget also secured another $300 million for elevator replacements at 20 NYCHA developments through an agreement with the Dormitory Authority of the State of New York – the first planning phase of that funding launched in January this year.  

The governor and State Legislature also approved the creation of the new Public Housing Preservation Trust, which will allow NYCHA to potentially raise billions for repairs and maintenance. 

The Trust is a separate public entity, which will lease developments from NYCHA on a long-term basis. The trust will be able to receive Tenant Protection Vouchers (TPVs) from the federal government, and leverage those to issue bonds and raise billions more. The state has so far only authorized NYCHA to turn over 25,000 apartments to the trust, which will be able to raise up to an estimated $3.4 billion as a result. The trust could raise up to $15 billion if all 110,000 apartments are brought under its management, though that would necessitate an expansion of the threshold in the state law as well as, per the current trust law, the approval of the residents of the individual developments according to voting standards developed by legislators and NYCHA.

There are several risks to the untested trust model. As the Independent Budget Office noted in a recent report, the city would need almost $500 million in Tenant Protection Vouchers from the federal government for 25,000 units, and up to $2.2 billion for 110,000 units – the federal omnibus spending bill only allocates about $337 million for TPVs across the country. Even under Democratic control of the White House and both Houses of Congress throughout 2021 and 2022, NYCHA did not receive a major capital allocation, though some members of New York’s congressional delegation continue to try to make it a priority.

The New York City Council is also considering a non-binding resolution, sponsored by Council Member Alexa Avilés, chair of the Council’s public housing committee, calling on the state to fund half of a roughly $3 billion annual capital funding increase for NYCHA. 

[Read: Preservation Trust and Beyond: Report Assesses NYCHA's Progress and Challenges in Executing 'Blueprint for Change'

Rent Arrears, Operating Budget In Focus
Though major questions remain about capital funding, advocates say the state and city urgently need to turn their attention to NYCHA’s operating budget, which was thrown into disarray by the pandemic. 

NYCHA’s fiscal year follows the calendar year, unlike the state fiscal year, which begins April 1, and the city fiscal year, which starts July 1. At a December 22 meeting, the NYCHA board released its latest financial plan for 2023-2027, painting a dire financial picture.  

NYCHA’s operating budget for 2023 is expected to be about $4.4 billion, the same as 2022, but with a $35 million deficit despite dipping into reserves to the tune of $65 million. It will also leave the authority’s reserves severely depleted. The agency will have only about $145 million left at the end of 2023, less than the $254 million that would constitute just one month of reserves – HUD recommends that public authorities like NYCHA should have at least three to four months of reserve funds. NYCHA currently has about $211 million in reserve after using $100 million to cover 2022 costs.

According to the document, the agency’s rent arrears reached $454 million from 73,028 households as of November 30, 2022, up from $125 million in 2019 prior to the pandemic. The authority is only collecting about 65% of rent it is owed, down from more than 90% annually before the pandemic.

The Community Service Society, an anti-poverty group with a focus on public housing, estimated in a recent report that by June 2023, more than 50,000 public housing households across the state will owe about $589.4 million in rental arrears. 

“The problems facing NYCHA can seem overwhelming, but helping tenants pay rent arrears is a right-sized, money-saving step that will have a direct, immediate impact,” wrote Courtney Bryan, executive director of the Center for Justice Innovation, in a February 28 op-ed at Gotham Gazette. CJI provides housing assistance to low-income New Yorkers through its Red Hook Community Justice Center. “Not only will it forestall a crisis for thousands of families, but it will give NYCHA an essential infusion to prevent its problems from getting worse. If federal money isn’t coming, that means devoting city and state dollars to solving it. The health, safety, and well-being of hundreds of thousands of vulnerable New Yorkers is at stake.”

NYCHA has submitted applications to the state’s Emergency Rental Assistance Program (ERAP), created in response to the pandemic and using federal funds, for 31,330 households, worth about $120 million. When ERAP was created, NYCHA tenants were placed low on the priority list, and none had received any ERAP funding as of December. 

“I do think the more immediate issues we face right now are arrears in both public and affordable housing,” said Rachel Fee, executive director of New York Housing Conference, a nonprofit advocacy organization. “I do think that’s something the Legislature and the governor are going to have to grapple with.” Besides NYCHA tenant arrears, NYHC released a policy brief on March 9 which showed that tenants in 31% of 49,121 affordable housing units with regulatory agreements have rent arrears totaling $145 million. 

“I think the last thing anybody wants to see is a massive wave of evictions, and we know that the only place these people will have left to go is going to be homeless shelters. That’s not an outcome that anybody wants,” she added. 

On Wednesday, March 8, State Senator Brian Kavanagh, chair of the Senate Housing Committee, and Assemblymember Grace Lee, member of the Assembly Housing Committee, rallied at the  State Capitol to call for $389 million in funding for the ERAP to cover rent for tenants of public housing and subsidized housing. The Senate and Assembly are expected to release their one-house budget resolutions next week in response to the governor's budget. 

The drop in NYCHA's rental revenue is also threatening NYCHA’s ability to abide by the terms of a 2019 agreement with the federal Department of Housing and Urban Development to implement repairs at NYCHA apartments over five years. The agreement, which also installed a federal monitor over the authority, stemmed from the settlement of a lawsuit brought by the U.S. Attorney for New York’s Southern District over living conditions in NYCHA developments. 

“NYCHA has worked diligently with our elected partners to make them aware of the Authority's capital and operating needs, as well as our current budget challenges due to significant rental arrears,” said a NYCHA spokesperson, in a statement. “We look forward to outlining our budget priorities for the fiscal year.” NYCHA leaders are expected to testify at a City Council budget hearing on March 13. 

Mayor Adams, who regularly touts last year's passage of the Preservation Trust as key to NYCHA's future, did not bring up new NYCHA needs during his February state budget testimony to the Legislature in Albany. The mayor's office did not respond to a request for comment for this story.

The New York State Association for Affordable Housing (NYSAFAH), a trade group, and Legal Aid Society have proposed a new $2 billion Tenant Fund for Affordable Housing (TFAH) to cover the cost of rent arrears for tenants in NYCHA and in affordable housing developments that have regulatory agreements with the city and state. Of the $2 billion fund, $500 million would be set aside for NYCHA alone.

Jolie Milstein, president and CEO of NYSAFAH, bemoaned the “unforeseen consequences” of ERAP and said that the rental arrears issue threatens to create an eviction crisis while jeopardizing affordable housing developments that desperately need rent revenue. “We helped inform the ERAP program, we never liked the way it actually turned out,” she said. “We have always argued that there should be a wholesale application to pay arrears” for tenants of affordable and public housing. 

The Tenant Fund for Affordable Housing would give both tenants and housing operators relief – it would cover all rental arrears for tenants with a disability, documented unemployment, or individuals who applied for ERAP and would have been eligible before it ran out of funds; it would cover two-thirds of the rent for other applicants; and it would allow landlords to independently apply for assistance.

“Our clients and all low-income New Yorkers who are facing eviction and were left out of the Emergency Rental Assistance Program (ERAP) deserve protection from displacement," said Judith Goldiner, Attorney in Charge of the Civil Law Reform Unit at The Legal Aid Society, in a statement. “ERAP put the most vulnerable tenants last in line and left them at risk of eviction and homelessness. The Tenant Fund for Affordable Housing would solve this challenge by finally eliminating arrears in a way that makes sense for everyone."

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

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Note – This article has been updated. 

CUNY Union Rallies for New Contract Amid Push for Additional State Budget Investment


 

PSC CUNY contract rally (photo: @psccunygc)


City University of New York faculty, staff, and students marched outside CUNY Central headquarters in East Midtown early Monday morning, in a nearly 500 person-strong rally organized by the Professional Staff Congress – the union representing over 30,000 CUNY employees. The rally was scheduled for the eve of the expiration of PSC’s labor contract with CUNY, and union members are gearing up to negotiate an extensive list of demands for their first contract since before the covid pandemic.

Manhattan Borough President Mark Levine and PSC President James Davis were among the speakers at the rally, alongside other union members and student government representatives. They expressed urgency to negotiate a contract that commits to a wage increase above pandemic-era inflation, a greater focus on staff diversity and inclusion, tuition decreases, and pay parity for adjunct instructors.

“I believe in lower tuition and higher salaries,” said Levine, a first-term Democrat. “The way to attract and retain students is to make CUNY an outstanding institution with well-compensated staff and faculty.”

After significant wins by academic labor unions in the University of California system and the New School here in New York, PSC-CUNY is looking to improve the working conditions of its tens of thousands of members across the city. Representatives from all five boroughs were present at the rally, and many speakers pointed to CUNY’s role in providing education for essential roles such as healthcare workers and teachers throughout New York City.

In a survey sent out to members late last year by PSC-CUNY, 95% of respondents cited “Protecting the Quality of CUNY Education” as their greatest concern. PSC Vice President Andrea Ades Vásquez connected it to contract negotiations, saying, “A fair contract means better wages for ourselves, but it also means a quality education for our students.”

Alongside other speakers, Vásquez referenced the out-of-class hours faculty and adjunct professors work unpaid, as many take on the advising and support roles of staff positions that have not been filled due to budget cuts and understaffing.

“Without adequate funding to meet their rising costs, [government] agencies cannibalized their own operating budgets and cut staffing and services,” Davis told Gotham Gazette in a statement. “At CUNY that meant shortages of full-time faculty, advisors, and mental health counselors, further adjunctification of the teaching corps and inadequate maintenance.”

A few hours after the rally, Davis joined CUNY Chancellor Félix V. Matos Rodríguez and representatives of other educational entities who testified at the State Legislature’s joint budget hearing on higher education in Albany. In their testimony, both Davis and Rodríguez made note of the significant budgetary increases earmarked for higher education within Governor Kathy Hochul’s $227 billion Executive Budget plan.

Matos Rodríguez gave an optimistic report in his testimony, highlighting the successes of CUNY, the largest urban public university in the United States, educating roughly 220,000 students across its community colleges, senior colleges, and graduate center. He thanked Hochul for her budget proposal, which, among other investments, recommends $642.7 million in capital funding to cover much-needed building maintenance and infrastructure improvements at the senior colleges.

But Davis noted in his testimony that CUNY had requested $983 million for capital funding , much more than Hochul’s proposed allocation. “For any institution to have only 8% of its buildings in a state of good repair is a recipe for disaster,” Davis told legislators from the State Senate and Assembly, who will negotiate a final state budget with the governor. A new state budget is due by the April 1 start of next fiscal year.

Echoing comments he made earlier that morning at the PSC rally, Davis also noted Hochul’s proposed tuition increases, a proposition PSC vehemently opposes.

“CUNY needs help to stem enrollment declines,” Davis said. “We urge the Legislature to not only reject tuition increases, but strive for a New York where community colleges are free.”

While Hochul and legislators made major investments in CUNY in this year’s state budget, passed in April 2022, their commitments fell short of the “New Deal for CUNY” that PSC, legislators such as State Senator Andrew Gounardes and Assembly Member Karines Reyes, and many students had sought. But, they saw the gains of the current fiscal year as significant progress toward that agenda.

That push now coincides with the PSC contract negotiation. Some PSC members rallying outside CUNY headquarters on Monday were concerned about how their demands would be met. 

PSC Secretary Penny Lewis, an Associate Professor of Labor Studies at the CUNY School of Labor and Urban Studies, said that in previous contract negotiations, wage increases came from the CUNY budget, adding to the austerity the university operated under. “Under [Governor Andrew] Cuomo, every salary increase we won, [CUNY] had to pay for. They did not put more money into our system in order to pay for it,” Lewis said.

She added that a recent memo from Executive Vice Chancellor and CUNY COO Hector Batista announcing a hiring freeze and planned budget cuts was “outrageous” and sent the wrong message to the Hochul administration.

The February memo, sent to the presidents and deans of all CUNY colleges, further announced a savings target of $100 million on top of the previous $75 million target. Reaching this target “will require courage, creativity, perseverance, and discipline,” Batista wrote.

At Monday’s rally, a different set of words were chanted, with PSC members and their supporters calling for “raises,” “justice,” “community,” and “unity.”

As the crowd dispersed, Lewis said, “Right now, we have lower enrollment than we need. But in order to get that back, we need more investment, and that’s what CUNY management should be signaling.”

Davis also emphasized greater investment as means for CUNY to regain enrollment, which dropped roughly 10-15% during the pandemic but has rebounded somewhat this school year, and pointed to the need for budget gaps to be closed if Hochul is to stay true to her commitment to higher education.

“Governor Hochul has demonstrated that she values public higher education. Even this budget, which falls short of what CUNY needs, starts with an increase, not a cut,” Davis said via statement to Gotham Gazette, after the hearing. “We urge the governor to show respect for CUNY workers and continue her planned reinvestment in the university by returning to the principled practice of fully funding CUNY contracts.”

***
by Talia Barrington, Gotham Gazette

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After Hochul’s 2022 Veto, Lawmakers Reintroduce Bill to Protect Freelance Workers Statewide


(photo: @Sen_Gounardes)


The pandemic changed employment patterns across the country, with more and more Americans turning to freelance or independent work to make a living — only hastening a trend many years along. But New York State still lacks wage protections for freelance and independent workers, something two lawmakers are hoping to remedy after last year’s attempt to do so was vetoed by Governor Kathy Hochul, a fellow Democrat.

This week, Brooklyn State Senator Andrew Gounardes and Assemblymember Harry Bronson of Rochester reintroduced the Freelance Isn’t Free Act, a bill that would provide mandatory contracts, timely payments, and redressal mechanisms against wage theft for independent workers. The bill is modeled after similar legislation that went into effect in New York City in 2017. 

“I feel very optimistic,” Gounardes said in a phone interview. “I think last year, we ran up against the clock issue and were not able to have effective conversations with the governor's office about potential changes or other things that they may want to talk about.”

The legislation guarantees mandatory contracts to freelancers for any work over $250 or an aggregate of $800 or more over four months. The burden of providing a contract falls on clients, who can otherwise be penalized $250 for refusing to use one. Contracts must specify payment dates and, if they do not, must be paid out within 30 days of the work being completed.

It also includes anti-retaliation protections and legal assistance for freelance workers, as well as double damages for wage theft and attorney fees. Employers who are found to be engaged in a pattern of violations can be fined up to $25,000, and could also face potential criminal penalties. 

“In my many years as a labor attorney and now as a member of the New York State Assembly, I know that independent contractors are not protected by the same minimum wage laws as regular employees and generally ineligible for unemployment and workers compensation, and are some of the most exposed laborers in our state when it comes to wage theft,” said Assemblymember Bronson, in a statement on Wednesday. “Freelance workers are a rapidly growing sector of the economy. Our legislation is a commonsense approach to ending the economic discrimination against freelancers and putting a value on their contributions.”

A report by the consulting firm McKinsey & Co, released in August 2022, found that 36% of Americans surveyed, which translates to about 58 million people, identify as independent workers, up from 27% in 2016. Among the reasons for the uptick, the company cited larger pools of workers on digital platforms, a shift to independent workers because of the pandemic, and pandemic layoffs and high inflation which could have pushed people towards independent work. 

“This issue I think is always important, but especially in light of the pandemic, when we've seen people switch to non-traditional forms of employment in this way,” Gounardes said. 

Independent work often comes with a price, however. Freelancers suffer from wage theft, delayed payments and other issues that would otherwise count as labor law violations. A survey released February 16 by the Independent Economy Council, a volunteer-led research and advocacy group, found that 74% of independent workers said they were not getting paid on time and 72% had outstanding invoices that have gone unpaid – 59% of such workers were owed $50,000 or more for already completed work.

Those findings portray a similar picture as another study from 2019, published by the Freelancers Union and Upwork, which showed that 59% of freelancers said they lived “paycheck to paycheck” and freelancers lost, on average, $5,968 annually to wage theft.

The Freelance Isn’t Free Act passed the State Senate on June 1 last year, and was approved by the Assembly the next day. On December 12, it was delivered to the governor for her approval or veto. 

On December 23, however, Governor Hochul vetoed 165 bills, among them the Freelance Isn’t Free Act. In signing the veto, Hochul said she supported “efforts to ensure that New Yorkers are paid for their hard work.” But she expressed concerns about the costs associated with the legislation, requiring “at least several million dollars annually” and a significant increase in staffing at the state Department of Labor. As is typical of governors, Hochul vetoed most bills that were deemed to have enough of a fiscal impact that she believed they needed to be accounted for in the state budget.

A budget for next fiscal year is due from Hochul and the Legislature by April 1 — the governor has proposed a $227 billion budget for next fiscal year, up from $221.6 billion last year.

Besides citing “significant staffing and programmatic burdens,” Hochul also said the bill would require the Department of Labor to get involved in regulating private contracts between companies and non-employees, which falls outside the agency’s statutory authority. 

“We will review the legislation if it passes both houses,” said Hazel Crampton-Hays, a spokesperson for the governor, in an email. 

Gounardes, who chairs the Senate’s Committee on Committee on Budget and Revenue, was “skeptical” of the fiscal concerns that Hochul raised though he did concede that it will require more from the labor department. “I recognize that the Department of Labor has historically been underfunded when it comes to staffing up to prosecute and go after wage theft. It's an ongoing issue,” he said. 

But, he noted that the bill has a two-tiered enforcement structure. Workers can either seek administrative adjudication by the state Department of Labor or go to court for damages. “That also helps ease the burden on the department,” Gounardes said. 

Rafael Espinal, executive director of the non-profit Freelancers Union, echoed Gounardes, pointing to the success of New York City’s Freelance Isn’t Free Act, which was the first of its kind in the nation when it passed. The law, which Espinal helped pass as a City Council member, has helped freelancers claw back millions in unpaid wages. Between March 2017, when the law went into effect, through December 2021, the city’s Department of Consumer and Worker Protection handled more than 2,100 complaints under the law, and has won more than $2.4 million in restitution for 702 workers, according to the city’s fifth annual “The State of Workers’ Rights in New York City” report

“The pandemic has shown that if there isn't a social safety net in place to ensure people are getting paid for work they complete or don't have access to basic social safety net protections, that they end up being in financially dire situations,” said Espinal, who was highly critical of the governor’s veto. “I think that the pandemic has really created this higher understanding of the needs of the independent workforce and the importance of government playing a role in ensuring the protections they need to ensure their income.” 

Espinal has also pointed out that the governor’s State of the State policy agenda and executive budget proposal do not contain any new proposed protections specifically for independent workers. “The Governor’s clearly doesn’t have her finger on the pulse of NY. Freelancers were denied payment protections through a veto in 2022, now they’re left out in 2023,” he tweeted last month.

“This is a problem everywhere. It's not just a New York City problem,” Gounardes said. “You could be a graphic designer in Watertown, you could be a writer in Rochester, you could be a photographer in Binghamton. You could be anywhere and this is a challenge. So it only makes sense that we do this to help these folks.”

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

Read more by this writer.

6 State Budget Proposals Where Hochul and Adams are At Odds


Gov. Hochul and Mayor Adams (photo: Ed Reed/Mayoral Photography Office)


Governor Kathy Hochul and Mayor Eric Adams have a strong working relationship, one that they have repeatedly emphasized at joint announcements, news conferences, and speeches. It’s in clear contrast to their predecessors, who spent years squabbling over many issues, both parochial and consequential to New Yorkers. But with the recent release of the governor’s budget plan, the two first-term Democrats find themselves at odds over various cuts, cost shifts, and unfunded mandates for New York City that the mayor is none too pleased about. 

In his February 15 budget testimony before the State Legislature, Mayor Adams had several words of praise for Governor Hochul and her $227 billion budget proposal. He pointed to items in her housing agenda, investments in mental health, proposed changes to capital construction process reforms and M/WBE procurement, and more. He also cited boons the city got from last year’s budget including expanded child care, a new funding mechanism for the New York City Housing Authority (NYCHA), an expansion of the Earned Income Tax Credit, and a broadening of the city’s speed camera program. 

“Governor Hochul and leaders in the Senate and Assembly have been excellent partners to the city and our administration,” he said in Albany. “My hope, and my belief, is that we’ll be able to sort out our differences and work together to build a budget that works for all New Yorkers.”

Following his testimony, in a brief question-and-answer session with reporters in New York City, the governor echoed his sentiments. “We've been partners,” she said, “and this is still sort of a new era that people aren't quite used to, seeing the two of us really joined together in furtherance of lifting up the City of New York.”

Nonetheless, the mayor had several gripes about the governor’s budget, including inadequate funding for the migrant asylum-seeker crisis in the city; a proposal to increase the city’s contribution to the MTA; needed funding associated with her plan to lift the charter school cap in the city; lack of additional funding for a class size reduction mandate that is about to go into effect; hundreds of millions in cuts to Medicaid support; and a continuing sales tax intercept that saps $150 million from the city each year. 

[READ: In Albany, Mayor Adams Testifies on Governor Hochul's Budget, State Priorities]

Adams repeatedly emphasized that the additional costs the city estimates would result if Hochul’s budget passed would strain the city’s coffers. Adams recently proposed a $102.7 billion budget for the city’s next fiscal year, which begins July 1 and will take the next state budget into account. The mayor said his administration would have to cut basic services if the governor’s plan proceeds on those various fronts as-is.

According to his prepared testimony, the mayor intended to present that scenario as a warning to legislators who will negotiate the budget with the executive branch. “The city cannot possibly carry the weight of such big commitments without cutting essential programs that support New Yorkers,” said the mayor’s prepared remarks, which were provided to the media. “This is not a threat. This is math.” (Adams did not end up speaking the words in front of the Legislature.)

Asylum-Seeker Funding
The Adams administration has been struggling to manage the ongoing arrival of tens of thousands of migrant asylum-seekers from southern border states. According to the administration’s estimates, about 47,000 migrants have come to the city in the last year, which has tested the limits of the shelter system and strained the city budget. 

Adams has estimated that it will cost the city about $4 billion between the current and next fiscal years to shelter and provide services to the migrants, and he has repeatedly urged the federal and state governments to provide greater assistance. 

The governor’s budget allocates about $1 billion to the city for that purpose over two years – $767 million to reimburse the city for 29% of shelter costs (in line with other shelter cost-sharing); $162 million in operational and logistical support through the State National Guard; $137 million for health care costs; a $25 million resettlement fund for nonprofit groups; $10 million for legal assistance; $6 million for the city’s new shelter site at the Brooklyn Cruise Terminal; and $5 million for other resettlement assistance. Hochul’s budget also creates a framework that would split the costs of overall services evenly between the city, state and federal government. 

Adams has requested $1 billion to start from the federal government but so far the city has only been able to secure a paltry $8 million from the Federal Emergency Management Agency, leaving major costs unfunded. In a spending package passed in December, Democrats who controlled the federal government allocated about $800 million for assistance on the topic, much of which is expected to go to New York City through FEMA but has not yet arrived.

MTA Funding
In her budget proposal, Hochul presented a plan to address the MTA’s ongoing financial struggles. Though the transit authority has survived the pandemic with the help of federal aid, it currently has a $600 million structural deficit, which will increase to $1.2 billion in the 2024 fiscal year and $1.6 billion by the 2026 fiscal year.

Though Hochul advanced several measures to bolster the MTA, which runs the city’s buses and subways as well as the commuter rails – $300 million in one-time state aid, $800 million in additional revenue by increasing the Payroll Mobility Tax, and between $462 and $826 million from a share of licensing fees from new downstate casinos – she also proposed that the city should cough up an additional $500 million annually directly into the MTA’s operating budget.

The MTA is also planning to raise fares and tolls, which were scheduled for last year but postponed in partnership with Hochul and other state leaders in order to encourage a return of ridership to the system. 

“We are being told to add a half-a-billion dollars on to our budget for eternity,” Mayor Adams said at the legislative budget hearing. “That is just unfair. No other municipality has been asked to do this…We should spread the pain throughout the entire state because we realize the MTA is a statewide entity.”

The city already contributes $2.4 billion annually to the MTA’s operating budget, the mayor said, while estimating that the actual cost of the governor’s proposal would be about $526 million in the next fiscal year and above $540 million annually in the years that follow.

According to the governor’s office, the $500 million would cover the state’s current payments for the city’s paratransit program and discounted MetroCard program for students. In response to a Gotham Gazette inquiry about Adams’ testimony, a spokesperson for the governor noted that MTA New York City Transit accounts for 71% of the MTA's annual deficit.

The spokesperson also pointed out that the MTA pays half of the city’s paratransit costs, while other counties served by the agency – Nassau, Suffolk, and Westchester – each pay entirely for their own paratransit programs. The MTA also pays for 58% of the city’s student MetroCard program, while all other local governments in the state pay for costs of student transportation.

Additionally, the spokesperson pointed to the city’s own projections of billions in surplus revenues in the current and upcoming fiscal years. Those projections have only grown recently and appear in part to be at the root of the governor’s budgeting on the MTA and beyond.

Education Funding
At the legislative budget hearing, Adams reiterated prior complaints about a class size reduction mandate for city schools that was approved last year – part of the legislation to extend mayoral control of city schools – and goes into effect this year. Adams has said it comes without additional dedicated funding, but the governor and state lawmakers have pushed back on that assertion, noting large increases in state education aid to the city that they say can pay for the class size reductions.

Adams has estimated it will soon ramp up to cost the city $1.3 billion annually beginning in the fifth year of implementation; largely due to personnel and space costs.

The governor also proposed a new measure in her budget this year to eliminate the cap on charter schools in New York City. The city currently has 275 charter schools with 142,500 students, about 15% of the city’s schoolchildren. 

Adams said that lifting the cap, which he supports, could add another $1 billion in annual costs to the city, largely for school siting. Due to a state law passed under Governor Andrew Cuomo a number of years ago, the city government must either provide school real estate to charter schools or pay for them to rent other space.

Adams was somewhat evasive about the larger question of raising the cap on charter schools in the city, but explicitly reiterated that he supports the re-issuing of about 20 “zombie charters” that were issued but whose schools since closed.

The governor’s office has, in response, noted that the state is proposing to give New York City $13 billion in formula-based School Aid, up by $594 million or 4.8% — the highest amount ever proposed — which accounts for charter school students. Charter advocates have also noted that when students are educated by charter schools, per-pupil funding goes with the students and they are not students that traditional district schools must pay to educate.

Medicaid Funding
Governor Hochul’s budget proposes that the state will hold on to 100% of enhanced Federal Medical Assistance Percentage (eFMAP) funding to localities. That funding supplements local spending on Medicaid, without which localities will have to either absorb increased costs or cut services. Adams has said the city could lose up to $343 million from that proposal. 

The proposal is also setting up a fight with localities across the state, and the New York State Association of Counties has estimated that it will cost counties outside New York City about $281 million in the first year. Over a three-year period, it could cost $2.5 billion to all local taxpayers.

“Not only does this proposal harm New York's local taxpayers, but it also subverts Congress' intent for this funding to be shared with the local governments that contribute to the state's Medicaid program,” said Michael Zurlo, Clinton County Administrator and president of the New York State Association of Counties, in a statement after delivering testimony to the State Legislature last week. “At $7.6 billion a year, counties in New York contribute more than all other counties in the nation combined.”

Public Defender Funding
Hochul has said she wants to increase resources for both district attorneys and public defenders to tackle the increasing backlog of criminal cases in the state court system. It’s a call that’s been echoed by Mayor Adams as well. But Hochul’s budget doesn’t give New York City enough to fulfill that goal, Adams said, while imposing a new cost on the city’s coffers. 

As part of the budget, the governor has proposed wage increases for ‘18-B’ assigned counsel attorneys, private attorneys appointed by courts to defend indigent clients under Article 18-B of County Law. But she has only proposed about $44 million in additional funding to pay for raises, and only for 18-B attorneys under the Attorney for Child Representation program. That would leave the city with additional costs of about $18 million a year, Adams said in his testimony.

[READ: As Prosecutors Get Budget Boost, Public Defenders Seek More Funding Too]

Sales Tax Intercept
The governor’s budget continues intercepting about $150 million annually in sales tax from the city for the state’s distressed hospitals fund, a recurring money grab that has sapped hundreds of millions from the city over the last several years. “$150 million of the city’s tax revenues are intercepted yearly for this fund, and New York City is the only locality paying,” Adams said. “Despite this, not a single [NYC Health + Hospitals] hospital has received a dollar of support.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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