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WATCH: Agenda 2019: Movement Expected on Reform, But What Will It Look Like?


mnn agenda ep2

(photo: @MNN59)


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

mnn59 agenda ep2As part of Agenda 2019, the project from Gotham Gazette and City Limits, hosts Ben Max and Jarrett Murphy were joined on Manhattan Neighborhood Network by State Senator Liz Krueger, a Manhattan Democrat, and Susan Lerner, executive director of Common Cause NY, to discuss reform issues and the year ahead. Topics included voting and election reform, government ethics reform, and campaign finance reform. Krueger's new Democratic majority in the state Senate are pledging to work with the Democratic Assembly majority and Democratic Governor Andrew Cuomo to usher through a long list of stalled reforms, but what will actually get done? And what should it look like? Watch:

 Gotham Gazette:

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

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by Ben Max, Gotham Gazette
     

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Commission Recommends Pay Increases and Ethics Reforms for State Legislators


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(Photo via Wiki Commons)


Statewide elected officials, legislators and agency heads are slated to get pay raises next year following recommendations issued Thursday by a four-member panel that was created in this year’s state budget.

The New York State Compensation Committee voted on Thursday to raise the salaries of legislators for the first time in nearly twenty years, as well as for the four statewide offices and for executive agency commissioners. The committee will publicly release a report and deliver it to Governor Andrew Cuomo and the State Legislature on Monday outlining their binding recommendations on phasing in the salary increases over three years, accompanied by certain ethics reform measures. The raises will go into effect by January 1 unless the state legislature meets and rejects them.

The committee -- which included State Comptroller Tom DiNapoli, New York City Comptroller Scott Stringer, former State Comptroller and SUNY Board Chair Carl McCall, and former New York City Comptroller and CUNY Board Chair Bill Thompson -- was created in the state budget to determine an appropriate raise for legislators, based on cost of living and on salaries for legislators in other states. The current base pay for state legislators stands at $79,500 and has remained unchanged since 1999.

Per the panel’s unanimous recommendations, salaries for legislators will be raised to $130,000 by 2021, with lawmakers set to receive $110,000 in 2019 and $120,000 in 2020. The commission also recommended limiting outside income for legislators to 15 percent of their salary, in line with the rules for members of Congress, and the elimination of committee stipends -- commonly referred to as lulus -- for all but the top leadership in both legislative chambers.

“I think in looking at the fact that they haven’t had a raise in twenty years...when you talk about the issues of fairness, it is not the right thing,” Thompson said, arguing that the idea that legislators only work part-time is a mischaracterization due to their in-district work. The limits on outside income will take effect in 2020, because, according to McCall, legislators would need time to disengage from their outside income-generating activities and could not do so right away.

The panel also endorsed raising the governor’s salary to $250,000 by 2021, up from the current $179,000. The lieutenant governor, attorney general, and state comptroller, each of whom currently make $151,000, will see their pay rise to $210,000 salary by 2021. DiNapoli recused himself from that vote.

The pay raise committee was originally meant to be chaired by Chief Judge Janet DiFiore, but DiFiore announced in May that she would not serve because she believed a judge determining legislative pay was unconstitutional. The broader constitutionality of the committee has also been challenged, as it is still unclear whether a pay raise can be authorized by outside officials or if it must be approved by the legislature. The panel members, however, insisted that their recommendations are enforceable for all their proposals except the raises for the governor and lieutenant governor, which must be approved by a joint resolution of the legislature. They also maintained that tying the raises to an outside income limitation and curbing committee stipends was within their authority, which could potentially invite legal challenges going forward.

When the salary raises are fully implemented by 2021, New York will surpass California and have the highest-paid governor and legislature in the nation. McCall noted that coupling the pay increase with outside income limitations would also quell the discontent New Yorkers feel about giving raises to a legislature that has long been marred by scandal and corruption. “We really have to make sure that we send the signals to the public about how serious they are about doing their job and doing it well,” McCall said.

For executive agency heads, the panel proposed four classes of salary, a decrease from the current six, which will be assigned depending on the agency. By 2021, commissioners in the top class will make $220,000 and commissioners in the bottom class will make $170,000.

Legislative leaders have expressed support for the panel’s recommendations. Senate Majority Leader Andrea Stewart-Cousins announced her support for the measure on Thursday, hours before the meeting, while also concurrently declaring support for ethics reform. Assembly Speaker Carl Heastie testified to the Commission last week in favor of the raise, noting that legislators have financial strains similar to their constituents. “They too must finance college loans, meet the cost of child care, and provide for the wellbeing of elderly parents and loved ones at home,” Heastie said. He further argued that, because so many legislators live in the expensive New York City metro area, a pay raise was warranted to more adequately reflect the high cost of living here.

The New York Public Interest Research Group, which advocates for government reform, was skeptical of the panel’s recommendations, pushing for a more comprehensive set of “corruption-busting” reforms. “While we agree that the Congressional model is appropriate to regulate legislators’ outside income, advancing a reform in this area alone is inadequate,” said NYPIRG’s Blair Horner, in a statement. “We note that the ethical problems that have plagued the state have not been limited to the legislative branch. Given the stunning pay-to-play scandals that have rocked government, reforms in that area must be addressed. Failure to do so highlights the inadequacy of the reform package.”

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by Ben Brachfeld, Gotham Gazette

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Panel Previews 2019 Rent Regulation Discussion in Albany


rent reg agen

(photo: Edwin J. Torres/Mayoral Photography Office)


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

One of the most contentious issues on the 2019 docket in Albany will be the expiring rent regulations that apply to roughly 1 million apartments in New York City and determine several ways in which rents are capped and when and by how much landlords are allowed to increase rents or remove a unit from the regulated rolls. While the regulations are set to expire in June, it is widely expected that they will be extended, the main question is what exactly they will look like, and whether the fact that Democrats are set to control both the governor’s office and both chambers of the state Legislature will mean sweeping changes that benefit tenants.

Though that debate is certain to heat up when Governor Andrew Cuomo gives his State of the State address and the legislative session begins in the new year, a lot of discussion is already happening. On Tuesday, the New York Housing Conference hosted a panel discussion with key stakeholders in the rent regulations debate: State Senator Liz Krueger, a Manhattan Democrat; Assemblymember Steven Cymbrowitz, a Brooklyn Democrat; John Banks, the president of the Real Estate Board of New York; and Thomas McMahon, principal of consultancy TLM Associates. The hour-long discussion, which largely focused on rent regulations, but also touched more generally on housing development, was moderated by Gotham Gazette’s Ben Max.

“The Senate Democrats will be heavily focused on ensuring an improvement and strengthening of tenant protections in our rent regulation system,” Krueger said at the event, signaling that her new majority conference is looking forward to working with an Assembly majority that has held rent regulations as a top priority for many years.

Housing was one of the most prominent issues of the recent elections in New York, with the broad and ever-present issue of affordability talked about all over the state, some state Senate candidates in New York City running campaigns largely focused on rent regulations, and public housing crises popping up throughout. A slate of progressive Democratic reformers were swept into the state Senate on the promise of, among other things, reforming rent laws such as vacancy decontrol and how major capital improvements are assessed, and many candidates rejected campaign contributions from real estate developers. Those Democrats now join other state senators who will take over the majority from Republicans who were especially close with large real estate interests, and plan to team with Assembly Democrats who have been looking to strengthen rent regulations on behalf of tenants for years.

As legislators, negotiating with the governor, look to reform rent regulations and get the new formula right, there are certain to be complicated discussions, as members of Tuesday’s panel made clear. Stakeholders, from activists to developers, tenants to landlords, legislators to bureaucrats, will want their say in how new laws will be shaped. The state’s rent regulation laws are set to expire in June, two months after the state budget is due. Working rent reforms into the budget would provide faster resolution and may offer an opportunity for broader horse-trading as often happens in Albany, but a rushed job could also potentially leave open loopholes or fail to adequately address the issue.

To the potential chagrin of some, the panelists advocated a slow and steady process instead of immediate legislative reform, while hitting on a variety of specifics that must be considered.

“We will move slowly,” said Cymbrowitz, the Assembly housing committee chair, after Banks, the head of the city’s most powerful real estate lobby, advocated the same. “We will not just throw legislation, take them out of committee and just put them on the floor. We will have discussions with our partners, we will talk about it, and if there has to be changes to existing legislation, we’ll look at that as well.”

The Assembly has passed rent reforms such as repeal of vacancy decontrol, which allows apartments to be removed from rent regulation, on several occasions, but the Senate has been opposed. Krueger said that while the new majority with many new members that she will be a part of has not held a conference she believes the Senate Democrats will be “very open” to repealing vacancy decontrol. Governor Cuomo, who has close ties to real estate, recently said on WNYC radio that if a vacancy decontrol repeal bill passed the Legislature, he would sign it into law.

Vacancy decontrol, vacancy bonuses, preferential rent, the Urstadt Law preventing New York City from controlling its own rent laws, and the way landlords can account for major capital improvements (MCIs) are just some of the policies that could be on the table in 2019. Advocates who want to do away with or drastically modify vacancy bonuses, vacancy decontrol, and how MCIs can be passed on to tenants argue that they will protect tenants in rent regulated apartments from abusive practices by landlords and will protect the city’s rent regulated housing stock, which has diminished significantly in recent decades.

After Senator Krueger said that her conference will be focused on strengthening tenant protections, she later added that vacancy decontrol would definitely be taken up, and singled out MCIs in particular as well.

“People are not saying end MCIs, we’re saying end the ridiculous system where if you put in for an MCI, you get to get paid back for it forever by adding it onto the rents and inflation-adjusting it forever, when on average you’re getting your full money back in seven years,” Krueger said.

For Banks, whose organization is made up of and lobbies on behalf of the city’s largest real estate developers and landlords, reforms pose a fundamental threat to the industry’s ability to do business, and to the availability of good and abundant housing in the city. He argued that vacancy decontrol, wherein an apartment leaves regulation after rent passes a certain threshold, is a tool to subsidize regulated units.

“At a fundamental level, rent regulations affect the amount of money that can go into a building, the revenue streams that go into supporting a building,” Banks said. “If those numbers are not sufficient to support the construction and maintenance of the building, then it will further chill production. It will limit people’s incentive to create additional supply.”

“We shouldn’t vilify the entirety of a segment of our economy that is as important to New York City and New York State as the real estate industry is,” he said.

Banks, as well as the other panelists, also singled out the city’s property tax system as a culprit in the increasing unaffordability of housing. A commission jointly empaneled by the mayor and City Council is currently working to discuss potential reforms to the property tax system, and City Comptroller Scott Stringer introduced a housing proposal last week to fundamentally alter the city’s real estate tax scheme. Whatever the city commission puts forth will have to then be dealt with in Albany -- like with rent regulations, the city has limited powers over its own affairs with regard to taxes, though property taxes are one area the city has significant leeway.

“It is so complicated, it is so obtuse, and there are layers upon layers of abatements and other incentives to try to get to the fundamental problem, which is it doesn’t reflect the policy realities,” Banks said, also referring to the system as “broken” and specifically calling out Class 2 property taxes, the owners of which he characterized as shouldering the greatest tax burden.

McMahon, who worked in government for decades before moving to the private sector, argued that the property tax reform commission could be used as an opportunity to help vulnerable New Yorkers.

“Should we be looking at using property tax reform to supplement low-income tenants?” he asked. “I think it’s a conversation that could be had. So it’s important that the budget be cognizant of the need to extend this program.”

On the issue of public housing, both Krueger and Cymbrowitz lent their support to using Rental Assistance Demonstration, which Mayor de Blasio recently announced would be expanded to dozens of developments throughout the city and leverages both federal vouchers and private funding to allow private companies to manage NYCHA properties, providing additional sources of revenue for housing authority developments and key upgrades to the deteriorating housing stock.

“The RAD model seems to be working very effectively in other parts of the country and the state,” Krueger said. She clarified her remarks by noting that she is not in favor of privatization of NYCHA, which some say RAD effectively does, or at least is a gateway toward.

Krueger also didn’t outright dismiss the idea of building on unused NYCHA land, a controversial process known as “infill,” but argued that the balance of market-rate and affordable units needed to be carefully found, noting that she has a development in her district where a building is being built that will be 50 percent market rate and 50 percent affordable.

Cymbrowitz talked about using NYCHA land to build senior affordable housing, but acknowledged that more senior and other affordable housing means less revenue being brought in by infill for NYCHA’s tens of billions of dollars in needs.

But Krueger also cautioned about how infill developments are designed in terms of revenue.

“A real sticking point for the community was who’s getting the money that NYCHA will get from the building,” Krueger said. “Residents want their problems fixed, and many of their position is if you’re going to be putting a new building on our site, you’re taking away a playground, at least the money that’s coming in should come to meet the needs of this facility.”

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

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by Ben Brachfeld, Gotham Gazette

Read more by this writer.

Agenda 2019: High Hopes for Long-Awaited Reforms


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Gov. Cuomo signs legislation (photo: Kevin P. Coughlin/Governor's Office)


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

The 2018 election cycle in New York laid bare the myriad failings of the state’s political system that advocates and reform-minded elected officials have long recognized. Several candidates, many in it for the first time, ran competitive races on the backs of small dollar donors while highlighting the lax campaign finance laws that allow wealthy interests to fund campaigns across the state. Corruption in government and ethics reforms were salient issues, particularly so in the gubernatorial and attorney general races. In New York City, chaotic Election Day administration brought renewed scrutiny to the long mismanaged Board of Elections as well as the state’s arcane voting and elections laws. And voters, for the first time in a long time, seemed to be paying attention to it all.

“There is a tremendous amount of demand for democracy reforms,” said Sarah Goff, associate director at Common Cause New York, a government reform advocacy group. “The state Legislature has the unique opportunity, with the dramatic shift in landscape, to prove to voters that they got the message.”

As Democrats won full control of the state Legislature and, yet again, the governorship on November 6, government reform advocates like Goff rejoiced. After years of legislative paralysis on their priorities -- aided in no small part by Republican obstructionism and abetted somewhat by lackluster Democratic commitment -- a slew of election, campaign finance, and other reforms now seem all but assured to pass in 2019 (though few are counting any chickens before they hatch).

Democrats who overwhelmingly controlled the Assembly have been approving measures for years that would open up elections, limit the power of big money, and create more accountability in government. The party now also controls the state Senate for the first time in nearly a decade and with a strong margin that is likely immune to the internal divisions that cost Democrats the chamber in the past. Democratic leaders -- Governor Andrew Cuomo, Assembly Speaker Carl Heastie, and newly-minted Senate Majority Leader Andrea Stewart-Cousins -- made concrete promises on the campaign trail and will no longer have any excuses for failing to follow through on professed priorities like early voting, lower individual campaign donation limits, and a public-matching campaign finance program -- among several others.

“The Governor will continue to lead the fight to strengthen our democracy and restore confidence in government by advancing additional ethics and voting reforms, including but not limited to closing the LLC loophole, restricting outside income, creating a full-time legislature, expanding financial disclosure requirements, and instituting early voting and automatic and same-day voter registration,” said Hazel Crampton-Hays, a Cuomo spokesperson in an email. “We look forward to working with the Assembly and new Senate Democratic Majority to pass these critical priorities this session.”

Most of the broad election and voting reforms that Democrats are promising are also backed by the new Fair Elections for New York coalition, comprised of 91 organizations including government reform groups, political clubs, labor unions, faith-based organizations, and grassroots advocates fighting for everything from immigration and tenant reform to environmental protections. It’s an eclectic alliance that brings together both partisan and nonpartisan groups because, they say, they recognize that strengthening New York’s democracy is the first domino in improving, on multiple fronts, the everyday lives of New Yorkers.

“The need for an overhaul of New York’s voting and campaign financing system is apparent and well documented,” the coalition members wrote in a letter sent Monday, November 26, to the governor and state Legislature. “It is inherently inequitable, unfair and allows an exorbitant amount of power to be concentrated in the hands of the very few wealthy and well-connected.”

“I think this is going to be one of the most productive sessions in the history of New York State,” State Senator Michael Gianaris of Queens, who will be deputy majority leader to Stewart-Cousins starting in January, told Gotham Gazette after an unrelated news conference in City Hall Park.

Still, pushing through a long list of reforms, some more controversial than others, will not be easy. There are many details to work out, and some politically contentious issues to decide, starting with whether legislators will get a pay raise for the first time in two decades, and whether there will be clear agreement on ethics reforms to accompany such a raise. While there seems to be widespread agreement on passing early voting, will partisan lawmakers take on restructuring the New York City Board of Elections, a move that would likely happen in spite of protests from local party affiliates? These are just a few of the many questions that face Democrats in state government, starting with the governor, as the 2019 session looms.

“This isn’t just a moment that’s happening in New York State,” said Joanna Zdanys, counsel for the Democracy Program at the Brennan Center for Justice, which is part of the Fair Elections coalition. “I think that the election this November showed that democracy reform is a major priority in jurisdictions small and larger across the country, on the local level as well as the national stage.”

Voting Reform
Voter turnout surged in New York in both the September primary and the November general. More than 45.6 percent of registered New Yorkers cast a vote on November 6, up from 33.2 percent in 2014, largely driven by a “blue wave” of Democratic voters incensed and energized since the election of President Donald Trump. But turnout has, more often than not, been anaemic in past elections. In the 2016 presidential, for instance, New York ranked 41 out of 50 states for turnout.

Advocates say these dismal numbers owe to “passive voter suppression” stemming from the state’s outdated voting laws. New York is one of only 13 states that do not allow early voting, and registration and party enrollment deadlines are needlessly long, all serving to limit, intentionally or not, participation in elections.

There have been a few incremental efforts at the state and city levels to expand and protect the franchise, but larger reforms have been blocked by the Republican Senate while Democrats like Cuomo and Heastie have kept them on the backburner in terms of policies they’ve pushed to bring Senate Republicans along during annual compromises.

Governor Cuomo also signed an executive order in April restoring voting rights to parolees (Those on probation were already allowed to vote). The New York City Council pushed that measure further by passing a law mandating that individuals released from city jails be given a written notice about their voting rights and a voter registration form. The Council has taken other steps as well, expanding access to interpreters at polling sites in immigrant-rich communities.

Mayor Bill de Blasio attempted to leave his own imprint on the voting system by launching the DemocracyNYC initiative, which includes a ten-point plan to encourage more voters to register, to ease access to the polls, and to provide more transparency around lobbyist activities and civic education in city schools, among other measures.

A larger package of reforms that advocates want and that can bring substantive change has repeatedly failed in the Senate and when Democrats take the chamber in the upcoming legislative session in January, they have pledged quick movement on seeing at least some of them through. These include automatic voter registration, same-day voter registration, no-excuse absentee ballots, electronic pollbooks, shortening party (change of) enrollment deadlines (which are the longest in the country) and pre-registering 16- and 17-year-olds.

However, the first item that’s likely to pass is early voting. Ahead of state budget negotiations this year, Cuomo proposed funding an 12-day early voting program and the measure did not budge. What many see as the pressing need to implement early voting was bolstered after the Election Day debacle in New York City, where higher turnout, a complicated ballot design, bad weather, aging ballot scanning equipment and a lack of preparedness by the city BOE together created long lines at the polls and frustrated voters and elected officials. Early voting, government reformers agreed, would have preempted those issues, though turnout was not so high that the system should have buckled under conditions that did not include the weather-ballot combination. Still, early voting, which exists in more than three dozen states, is also seen as an issue of equity and fairness, giving people the opportunity to vote on multiple days, which is especially relevant for those with little control of their work schedules, among others.

“I think there will definitely be a very clear consequential order to how things move and a clear cadence from where we sit and where the coalition sits,” Goff of Common Cause said. “Early voting is a easy no-brainer, this can easily be done in the first 30 days. We are...very optimistic that this will happen very quickly.”

Elections and Campaign Finance Reform
Earlier this year, in response to Russia’s interference in the 2016 presidential election, the state Legislature passed and the governor signed the New York State Democracy Protection Act, which instituted new regulations for online political advertisements including disclosure of who purchased them and requiring the BOE to archive all online ads.

While those were lauded as important measures to provide more transparency in campaign expenditures, it’s on the fundraising side that things remain opaque, and reformers say the state’s laws need substantive improvement. A significant proportion of campaign contributions flow to candidates through limited liability companies, which are not required to disclose their owners and can help individuals and corporate entities evade limits on donations (which are already far too high, many argue). The LLC loophole is, perhaps, the most derided aspect of state elections and one that both Democrats and Republicans exploit, though it has most benefited Cuomo and Senate Republicans, two entities most friendly to real estate interests, which are often behind the creation of LLCs.  

“Corporations shouldn’t be allowed to buy elections,” said Julissa Bisono, lead organizer at Make the Road New York, an immigrant-advocacy group and another Fair Elections coalition member. “Every year we are up in Albany fighting on housing, fighting on more funding for our schools and it’s just been really difficult to pass legislation because big corporations are contributing money to these elected officials...so that they will block legislation that would affect low income communities, and communities of color.”

Cuomo, the biggest beneficiary of LLC donations in recent election cycles, has repeatedly vowed to close it but did not put significant political capital into doing so, blaming Senate Republicans for blocking the legislation. Next year, that is expected to change as the governor has made it among his top priorities and Democrats will take control of the Senate having run on the issue.

Democratic control over both the Assembly and Senate also bolsters the odds of the state adopting a public campaign financing program, possibly similar to New York City’s voluntary program that matches small dollar donations with public funds to help level the playing field for candidates. A pilot program for the state comptroller race in 2014 failed to gain any traction but there has been renewed attention in this last cycle to campaign financing and how it determines not only who is elected to office but what legislation eventually makes it through the Legislature.

“There is absolutely no excuse not to get rid of the LLC loophole and no excuse not to bring publicly financed campaigns to a vote,” said Fordham Law professor Zephyr Teachout, in an email. Teachout unsuccessfully ran in the gubernatorial primary in 2014 and in the attorney general primary this year, both times emphasizing the need to tackle rampant corruption in state politics, starting with campaign finance reform. “If there are people out there who oppose publicly financed campaigns, we need to know now and be ready to primary them,” she added.

There are other ways that New York can also tweak election management to encourage both turnout and efficient administration. This year, the state held two primaries, one in June for congressional races and the September primary for state races. Advocates have repeatedly pointed out that multiple primary elections both confuse voters and lead to fatigue, questioning why the state Legislature would spend more money on separate ones instead of consolidating them to be held on a single day.

The New York City BOE’s election fiasco has also prompted calls for reforming the agency, which is funded by the city but is technically a state entity. The City Council and Mayor de Blasio have sought to improve the board’s functioning by professionalizing its staff and reducing the influence of partisan appointees, though there is little enthusiasm even among Democrats for removing the county political parties from nominating BOE commissioners. The Board is under no obligation to heed the city’s authority.

“We see it every election day, that the board of elections is in desperate need of reform,” Gianaris said. “Once we have an elections committee chair which should be in the next couple of weeks, that should be something we focus on pretty aggressively.”

Ethics Reform
Good government advocates are looking to the New York City Council as an exemplar of the types of reforms that the state Legislature should pass. In 2016, Council members voted to give themselves, and other city elected officials, significant pay raises. But at the same time, the Council banned almost all types of outside income for members, eliminated committee chair stipends, also known as lulus (which were open to abuse as reward and punishment and salary padding), and improved financial disclosure requirements.

“Albany should look to all the things we’ve gotten done in the City Council over the past five years,” said City Council Member Ben Kallos, who previously chaired the governmental operations committee and helped lead the reform effort, “and it starts with no outside income, no more lulus, campaign finance reform...I believe that those three things would help clean up a lot of the corruption in Albany.”

To the dismay of good government groups and activists, however, the governor and Legislature have repeatedly wrestled over ethics reform with little to show for it. Cuomo infamously came to power promising that he would clean up Albany but later shut down the Moreland Commission that he had set up to fulfil that very pledge in the face of a resistant Legislature that kept seeing its members hauled off to jail. The compromise Cuomo struck with the Legislature created the state-run Joint Commission on Public Ethics (JCOPE), which many have criticized for being an inefficient agency with too-close ties to the governor and legislative leaders, who appoint its members.

Gotham Gazette: Democrats who ran for attorney general either called for scrapping JCOPE or restructuring it. Even Cuomo conceded, in his general election debate with Republican gubernatorial nominee Marc Molinaro, that he would like to see a more independent JCOPE, which oversees ethical behavior in state government. Cuomo suggested that there could be different ways its members are appointed, but did not put forth a concrete proposal.

And though he was initially silent when the state Board of Elections proposed new rules that could curb the powers of its own enforcement counsel, Risa Sugarman, who investigates campaign finance wrongdoing, the governor did criticize the BOE when the rules were later approved.

Cuomo has insisted, and reform advocates agree, that state legislators should work fulltime and that outside income should be limited or prohibited while financial disclosure requirements should be expanded. It was outside income that was central to the recent corruption convictions of former Assembly Speaker Sheldon Silver, a Democrat, and former Senate Majority Leader Dean Skelos, a Republican.

But the governor sought to convince the Legislature to pass those ethics reform by leveraging the work of a state commission created in 2015 to look at pay raises for state elected officials. Legislators have not received a pay bump since 1999 and Cuomo said they shouldn’t unless they approved new reforms. That commission came to a contentious end with Cuomo’s appointees effectively killing any chance of increasing compensation for legislators.

This year, Cuomo and the Legislature again empanelled a pay raise commission through the state budget and it has already been beset with troubles over the constitutionality of its composition. But, it is set to issue binding recommendations that would go into effect unless the Legislature meets to vote them down -- in effect, lawmakers set up a system that would give them raises with their fingerprints removed. But, there is also controversy around pay raises without agreements to accompanying reforms, something legislative leaders have resisted.

Another significant step towards accountability in Albany could happen under the attorney general’s office. During the Democratic primary, the four candidates agreed that the attorney general must be able to independently investigate state officials, which the office can currently only do in most cases after receiving a referral from the governor or another entity with that power, such as a local U.S. Attorney or even the state comptroller, in some instances. All the candidates agreed that the office should have a permanent, standing referral to do so and Attorney General-elect Letitia James has promised to immediately seek that authority after taking office. Still, it is something that then-Attorney General Andrew Cuomo called for when he was in the role but has not provided since becoming governor himself.

One Charter, Two Commissions
New York City voters overwhelmingly approved three ballot measures on November 6, which lowered campaign contribution limits, imposed term limits on community boards, and created a new civic engagement commission that will also work to improve and report on poll site interpretation services.

But more sweeping changes may lie on the horizon. The three 2018 referenda were placed on the ballot by a Charter Revision Commission empaneled by mayoral fiat. A separate commission was created soon after through City Council legislation with appointees chosen by the mayor, the Council speaker, the public advocate, the comptroller, and the five borough presidents. That commission is taking a far more expansive look at the city’s governing document and the powers and responsibilities it delineates to the different parts of city government.

As envisioned by Letitia James and Gale Brewer, who proposed the initial legislation, the commission could alter the structure of city government in a way that hasn’t been done since 1989 by a previous commission. “I think the Charter Revision Commission will really be the biggest place where we talk about what the functions of government are” said City Council Member Keith Powers, “how do the mayor and the City Council interact with each other, what agencies should be empowered here, how to do budgeting, things like that.”

[Read: Elected Officials Present Broad Proposals to 2019 Charter Revision Commission]

The 2019 commission appears to be looking at budget and land use processes, and may also take up two prominent issues that the mayor’s commission punted on -- instant runoff voting, also known as ranked choice voting, and setting up a system of independent redistricting of City Council districts.

Rules of the Room
Under City Council Speaker Corey Johnson and his predecessor, Melissa Mark-Viverito, the 51-member legislative body has passed a series of reforms and rules changes to give more power to members, create more transparency in how bills become law, and improved the internal culture of the Council. While Mark-Viverito did so through formal rules reforms, Johnson has made more administrative changes in keeping with some promises he made while running for speaker, though he has yet to move on others.

Reformers say that must happen in Albany as well. Under Cuomo, the Legislature has passed eight on-time or nearly-on-time budgets, but to do so, the governor has repeatedly employed a mechanism called a “message of necessity” that allows rushed votes on massive packages of legislation with little to no public review or debate. The entire process draws the ire of some legislators and virtually all reform advocates each year.

“We would love to see this year’s state Legislature no longer do these end of session big uglies,” Goff said, referring to the omnibus legislative package regularly passed at the end of the legislative session, “where ethics reform is crammed in at the last minute at 4 a.m. behind closed doors, and sort of gets carted out with minimal conversation and public engagement.” She hoped that the newly elected progressive Democrats, first-time legislators many of them, will help “crack some of the calcified power structure and culture in Albany.”

Teachout argued for democratizing the Legislature, as did Assembly minority leader Brian Kolb, a reform-minded Republican.

“We should allow for a simple majority of members to bring any bill to the floor for consideration and a vote, regardless of leadership objections,” Teachout said. “For too long, Albany is where responsibility goes to die -- electeds say they support one thing, but without a public vote, we don't know what they are saying behind closed doors.”

Kolb drew a parallel between Democrats in the House of Representatives and in the state Senate. Both chambers returned to Democratic control in the midterms, with young, first-time electeds who are now leading calls for empowering rank-and-file members. He said term limits were necessary, for leadership and committee chairs, for that to happen. “[B]ecause that’s where power becomes basically consolidated as people get to stay in these positions for a long, long time,” he said. “We think that there should be a change to that process that would break up the monopoly of power. And of course...any statewide legislative negotiations should include the minority party in both houses of the legislature, whether it’s the budget or anything else that matters.”

There are indication that, at least in the State Senate, there may be a culture shift. “There has been a lot of justified criticism of Albany that it’s too driven by the leadership and people don’t have a say,” Gianaris said. “We have 15 new members, I think [Majority Leader] Andrea Stewart-Cousins has made it clear that she intends to talk to all those members and make sure we have consensus on whatever we’re going to do.”

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

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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Note - This article incorrectly stated that the governor and the state legislature appoint the executive director of JCOPE. They only appoint its commissioners. The article has been updated.   

As Affordability Crisis Becomes More Acute, Real Estate Donations Emerge as Litmus Test for Some Democrats


 Ocasio-Cortez Teachout

Alexandria Ocasio-Cortez & Zephyr Teachout (photo: Gotham Gazette)


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

Queens City Council Member Jimmy Van Bramer has said he will refuse donations from wealthy landlords and the real estate industry as he runs for borough president. Julia Salazar, a democratic socialist in Brooklyn, defeated an eight-term incumbent state senator using her rejection of real estate donors as a rallying cry. Alexandria Ocasio-Cortez did the same when she toppled Democratic Rep. Joe Crowley and became the youngest woman elected to the United States House of Representatives. Zephyr Teachout sought the Democratic nomination for attorney general while eschewing real estate contributions and making it a core plank of her campaign. Nomiki Konst, an investigative reporter, recently launched her campaign for New York City public advocate with the same promise.

New York’s real estate industry, most of it concentrated in the dense confines of New York City,  has long played a significant role in funding candidates for elected office up and down the ballot across the state and beyond, a role that candidates of both major parties and political insiders have always recognized. But as voters, particularly energized, activist Democrats, focus on the affordable housing crisis and take heed of the state’s broken campaign finance laws, including loopholes that donors, especially those in real estate, have exploited to pad the coffers of legislators and executives, some progressive Democrats have begun to reject campaign contributions from the real estate industry.

Affordable housing policy, including the already-begun debate over rent regulations decided in Albany that will be a significant issue in 2019, is at or toward the top of many activists’ lists, and housing justice advocates increasingly see campaign finance pledges as a litmus test for candidates. Increasing numbers of Democrats eschewing real estate money, or at least any given through the so-called LLC loophole, has given those activists and advocates cause for optimism that real estate’s role in state elections may be on the decline and that their elected representatives will heed the clarion call to protect tenants and listen to small donors over wealthy special interests.

“I think that it’s clearly a concern amongst a growing number of voters,” Van Bramer told Gotham Gazette. “I think it’s increasingly one of those issues that people want a response on from their elected officials and candidates. And I think that they’re right to be concerned about the influence of big money, generally speaking.”

“Money still plays a huge role in our elections and real estate is a good way to raise money in New York City and New York State,” said Celia Weaver, research and policy director at New York Communities for Change, a leading housing and economic justice advocacy group pushing campaign finance reform, strengthened rent regulations, and deeper affordable housing development. “It’s like oil in Texas.”

Though questions about the influence of real estate money have swirled for decades, Weaver traced the budding trend of declarations against taking any of it to Diana Richardson’s election to the state Assembly in 2015, in a district that includes rapidly gentrifying Crown Heights and at a time when state rent regulation laws were up for renewal in the state Legislature. “Her decision to refuse real estate money in that election turned what would ordinarily be a pretty boring special election where the Democratic machine just gets to anoint the person who’s going to run and take the line to a widely covered exciting race that was really a referendum on the real estate industry and its role in politics,” Weaver said. “That became a huge touchstone for voters in the district.”

It’s common knowledge that the real estate industry has been a staple in electoral politics for decades and its members’ donations have been part of the picture across the political spectrum. Democrats and Republicans have benefited from them, none more so than Governor Andrew Cuomo, a Democrat recently re-elected to a third term. But the recent election cycle, the first since Donald Trump was elected president, saw greater awareness among voters about the power of state government and the special interests that fund campaigns. Actor and education activist Cynthia Nixon also used that backdrop to run a competitive primary challenge against Cuomo. She refused donations from real estate and issued a scathing indictment of the governor’s reliance on big donors in the industry, while calling for sweeping housing justice reforms.

Weaver also pointed to the high-profile corruption convictions of former State Assembly Speaker Sheldon Silver, a Democrat, and former Senate Majority Leader Dean Skelos, a Republican, in trials that exposed how a real estate firm, Glenwood Management, attempted to wield influence over legislation. Glenwood, an enormous donor to Cuomo and many legislators, recently made massive contributions to Senate Democratic candidates ahead of the November election where it appeared likely they would become part of a new majority in the chamber.

The primary mechanism for real estate donations has been the gaping loophole in state campaign finance law that allows limited liability companies with opaque ownership -- a common instrument in the real estate business -- to circumvent contribution limits. City Limits reported in September that LLCs had been used to donate more than $188 million to political campaigns since the late 1990s, with about $31 million given to gubernatorial candidates alone, including Cuomo. “Combining his campaign for attorney general in 2006 and his three runs for governor, Cuomo has received roughly one of every eight dollars donated by LLCs,” City Limits found. Those donations are largely dominated by the real estate industry.

Mayor Bill de Blasio has also come under scrutiny for accepting significant real estate donations, especially to a political nonprofit he established to push his agenda that became the subject of law enforcement investigations related to whether City Hall did favors for its donors.

A collaborative report in 2016 by ProPublica, The Real Deal and the National Institute on Money in State Politics tracked how real estate developers who benefitted from a prominent tax incentive called the 421-a program gave about $21 million to party committees and candidates since 2000, out of $83 million that the real estate industry donated in the same time.

“I think people are very much aware that rich donors including real estate developers and landlords are distorting our election system,” said Michael McKee, treasurer of Tenants PAC, a political action committee dedicated to affordable housing. “I think that’s the growing awareness. There’s no question about it.”

It was in that context that a slew of progressive Democrats ousted their more moderate and real estate-tied partymates from office with the support of smaller donors and by rejecting corporate backers. “The housing crisis in this city is out of control and going into a year when candidates are going to be debating rent regulations in Albany, voters wanted candidates that are gonna act with integrity and widely believed that candidates who work for the real estate industry won’t,” said Weaver.

Besides Salazar, Zellnor Myrie and Alessandra Biaggi similarly ran for and won Democratic primaries in the state Senate in opposition to wealthy real estate interests. Each of the three represents a district, much like a lot of the city, grappling with a deep affordability crisis and pockets of gentrification displacing low-income residents of color. Their opponents all received significant contributions from real estate.

The decision to reject real estate seems based in both principle and pragmatism. Biaggi made housing justice a prominent campaign issue as she successfully dethroned Senator Jeff Klein, once the powerful leader of the Independent Democratic Conference, a breakaway faction of eight senators that propped up Republican control of the Senate. Democratic voters rejected six of the IDC members, blaming them for preventing the passage of many bills, including stronger rent regulations, and replaced them with progressive Democrats, including Biaggi and Myrie.

“It’s not necessarily that taking real estate money makes you a bad legislator or a bad person...but for me, it’s very clear that it’s a slippery slope,” Biaggi said in a phone interview.

Even as she acknowledged how difficult it can be to run for office without wealthy donors, Biaggi said it was important to her to retain her independence and answer to everyday constituents, not just those who can write big checks. “The winning can’t take precedence over the fact that, once you’ve won, the people who have helped get you there are the people who are going to come knocking on the door and that’s really a very challenging thing to come to terms with,” she said. Biaggi spent about $330,000 on her campaign and won with 53.1 percent of the vote, while Klein disbursed more than $3 million to try to keep his seat and got 44.5 percent.

Salazar said her commitment, and Myrie’s and Biaggi’s, to refuse real estate donations proved that it’s possible to run a viable campaign with small donors, and build grassroots support and trust in communities by doing so.

“I think advocates have long recognized the correlation between the amount of real estate money that many electeds have taken and their failure to advocate vigorously for tenants,” she said. “When other candidates see those campaigns being successful and they see this growing and increasingly loud demand from advocates, I think that is what is translating to them paying more attention.”

Those in the real estate industry push back against being made the boogeymen of state politics. Real estate is, without a doubt, central to New York City’s fortunes and the industry comprises a large part of the city’s tax base. The sector is scapegoated more so than other industries and groups, like those in health care, finance, or education, that also employ somewhat similar tactics in state elections. And of course, many candidates regularly pursue real estate donors when running for office.

“There are people who are willing to accept our contributions because our philosophies or the ideas that we are espousing are aligned with their philosophies,” said John Banks, president of the Real Estate Board of New York, in an interview. “There are people who don’t want to accept real estate money because their philosophies don’t align with the work that the real estate industry does and there are people who move back and forth across that continuum.”

Banks pushed back against any notion that his industry has used the LLC loophole to improperly sway the political landscape to its benefit. “The real estate industry respects and follows both the letter and the intent of the law and to say that someone who follows the letter of the law is in someway undermining the legitimacy of the political process is a naive statement,” he said.

And, he noted, the real estate industry is intrinsically a part of New York’s landscape, more than any other, even finance, or technology. “Unlike some of the other industries, mobility is not something that is an option for us,” he said.

There are also Democrats, even those who call themselves progressives, for whom real estate donations are far from an insurmountable liability, even if they are unpopular with the party’s left wing. Cuomo sailed to reelection, in part by taking millions combined from LLCs and the real estate industry that he then used to overwhelm his less-funded primary and general election opponents over the airwaves. New York City Public Advocate Letitia James, not a close friend to real estate, accepted similar donations and was resoundingly elected the next attorney general of New York State. In the attorney general primary, for instance, James ran on a platform that included criticism of bad landlords and yet received $10,000 from an LLC linked to the Durst Organization, one of the largest real estate developers in the city. That LLC and seven others under the Durst umbrella also gave a combined $150,000 to one of James’ opponents, Rep. Sean Patrick Maloney, which became a line of attack from Teachout.

“The real estate industry is pretty broad and diverse,” said Jordan Barowitz, spokesperson for the Durst Organization. “I work in it, as do members of 32BJ and the super in your building and the residential broker who leased you your apartment.” He said “painting all these people with a pretty broad brush” is problematic. “Unfortunately there’s a lot of blaming in politics these days and it’s easy to point to one group or person or industry and say they’re responsible for everything that’s bad in this world and that’s pretty simplistic and wrong.”

“Honest politicians don’t take bribes and reputable donors don’t request quid pro quos,” he added.

There is a distance between bribes and quid pro quos on one hand, of course, and donations having some influence on policy-making, even if simply by virtue of how donations help candidates get elected.

McKee of Tenants PAC noted, for instance, that REBNY had begun donating larger sums in this election cycle to Democratic candidates once it seemed apparent that the party was going to regain control of the state Senate and, by result, the entire Legislature.

“REBNY saw the handwriting on the wall. They’re equal-opportunity opportunists. They don’t care who’s in the majority. They’ll try to buy influence with them by giving them money,” McKee said. “I’m not suggesting in any way that the mere fact that REBNY has started giving money to Democratic senators means that those Democratic senators are going to sell tenants out. That’s not my point. My point is that this is how they try to win friends and influence people, with big money.”

The influence of such donations can come down to seemingly small changes in policy, like the exact threshold at which an apartment leaves rent regulation, not necessarily major new legislation that would raise flags as donor-favors.

Gotham Gazette: Myrie wanted to avoid even the perception of corruption when he took his pledge, he said. “The number one reason that I did it was because...when we were gonna be facing the fight in Albany on whether or not we’re gonna protect tenants, I wanted there to be no confusion about which side I was on,” he said.

It would be hard to argue, he said, that real estate hasn’t had a corrupting influence on politics. “Albany for the longest time has passed watered down legislation,” Myrie added. “We have not protected tenants the way that we’ve needed to and that, you can draw the direct correlation to the increase in the amount of real estate donations to the Legislature. I think anyone looking at that objectively could say that it has had a corrosive effect on how we pass policy affecting our tenants.”

“Once you take that money, of course it influences how you legislate,” Biaggi said. “Now I think there are ways to protect against that, and that goes into campaign finance reform.”

Biaggi asserted that the path to stronger rent regulations runs directly through reforming the state’s campaign finance system, primarily through closing the LLC loophole, but also through lowering individual donation limits, where New York has some of the highest in the country. Closing the LLC loophole alone, advocates say, would take away real estate’s biggest weapon of political influence, and they insist it should be accompanied by a public campaign financing program, like the one currently used in New York City, to boost the voices of ordinary New Yorkers who only give $25 or $100 to a candidate.

Democrats in the Assembly have repeatedly attempted to reform campaign finance law but have been roadblocked for years by Republicans in the Senate, who have been major beneficiaries of real estate donations. Many, Cuomo included, have emphasized that ending the LLC loophole is among their priorities in the upcoming legislative session in January.

“If you had these kinds of reforms, candidates wouldn’t have to spend so much time cultivating rich people to make big donations,” McKee said.

On the other hand, Republicans have long-argued that labor unions often use campaign contributions to support and influence Democrats, and that any LLC reform should also institute limits on how local chapters of unions are classified in campaign finance law.

Weaver, from Communities for Change, said, “Not only are rent laws coming up in 2019 but I think there’s gonna be a big referendum on the role of money in politics generally…and the campaign finance stuff is also gonna be a referendum on tenant issues and real estate money in politics specifically.”

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

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

WATCH: Agenda 2019: Rent Regulations & Affordable Housing


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MNN discussion


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

dg eg agendaAs part of Agenda 2019, Gotham Gazette and City Limits are partnering with Manhattan Neighborhood Network (MNN) on a series of television shows. The first show is part of Agenda 2019 housing week: hosts Ben Max and Jarrett Murphy were joined by two leading non-profit advocates to discuss key elements of housing policy that will be on the agenda in the year ahead: Delsenia Glover, Executive Director of Tenants & Neighbors and Emily Goldstein, Director of Organizing and Advocacy at the Association for Neighborhood and Housing Development (ANHD). The four focused much of the discussion on state-level rent regulations that affect about 1 million New York City apartments and the de Blasio administration's affordable housing plan. Watch the full program below:

 Gotham Gazette:

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

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by Ben Max, Gotham Gazette
     

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A Closer Look at the Tax Incentives in the Amazon Deal


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Cuomo, de Blasio & an Amazon rep celebrate (photo: Kevin P. Coughlin/Governor's Office)


Amazon’s decision to put a corporate campus in Long Island City after a year-long, somewhat-public search for a host city and a series of incentives from New York City and State has drawn skepticism and outrage in Queens and beyond for a number of reasons.

Some activists and elected officials oppose the secretive process by which Amazon got its land, tax breaks and grant, others feel like the company isn’t a corporate entity the city and state should be welcoming because of labor, political and other practices. But all of the opponents to the Amazon deal seem to agree that that package of roughly $3 billion in incentives the trillion-dollar corporation is getting from New York is out of bounds, an inappropriate giveaway based on old economics, in the midst of both a strong overall city economy with low unemployment on one hand and affordable housing, public housing, and transportation crises on the other.

And while a look at the programs in question reveals that Amazon doesn’t appear to be getting tax incentives or breaks that wouldn’t be available to other large employers who set up shop in New York, economists and budget watchdogs suggest the outrage over the tax break package Amazon is getting presents an opportunity to reexamine New York’s use of subsidies to entice companies. (Note: there is one discretionary capital grant in the deal for roughly $500 million that is separate from the $2.5 billion in city and state tax incentives.)

Where does the money come from?
The three largest incentives Amazon is getting from New York come from three as-of-right (that is, incentives available to any company that meets the requirements) programs: the Excelsior Jobs Credit Tax Program, the Relocation and Expansion Assistance Program (REAP) and the Industrial and Commercial Abatement Program (ICAP). The latter two tax breaks are incentives established by the state government that affect the city tax rolls, while the former program affects state tax rolls.

“They’re state created, like 421-a,” John Kaehny, the Executive Director of Reinvent Albany, told Gotham Gazette about ICAP and REAP, with reference to the tax break known as 421-a that seeks to incent housing development with some affordability included. “So the New York City Department of Finance administers them, but they have to, they're made to by state law. Basically it's money that the state is directing be taken out of the city's tax revenue.”

Along with their as-of-right nature, all three programs require a company actually delivers jobs in order to take advantage of the breaks. In that sense, Amazon is no different from a hotel company or mobile phone infrastructure company or real estate company in applying for the programs. In the case of the Excelsior program, Amazon is taking advantage of a refundable tax credit equal to 6.85 percent of the total wages per new full-time job they create, and a capital investment credit equal to 2 percent of a company’s total qualified investments that result in new jobs.

For the city tax breaks, ICAP is a tax abatement program that may last up to 25 years, available to companies who undertake new commercial construction in areas outside of some exempted sections of Manhattan. It appears Amazon will be eligible for a 15-year ICAP that begins to decline in year 12. REAP is a per-job tax credit in which companies from either outside New York City or below 96th Street in Manhattan get a $3,000 per employee credit for 12 years for each employee that moves into the new office outside the REAP area.

In addition to the above programs, Amazon is also getting a cash grant from the state called an Empire State Development Capital Grant that’s potentially worth $505 million and is supposed to help defray some of the costs from building the new corporate campus. And because New York State is taking over the land where the office will be located and making it tax-exempt, Amazon will make payments in lieu of taxes (PILOTs) that the city has said will be equal to the property tax bill the company would pay on the land otherwise. Half of the money from the PILOT will go to the city’s general fund, and half of it will go towards infrastructure improvements around Long Island City.

All told, the tax breaks from the jobs credit, ICAP and REAP and the capital grant could wind up adding up to $3 billion in incentives to Amazon, if the company delivers the 25,000 jobs it’s promised over the course of 10 years.

What’s the problem exactly?
In his media appearances and statements to defend the incentive package, Governor Cuomo has suggested that these kinds of tax breaks are just the cost of doing business in America. But some economists, like James Parrott, the Director of Economic and Fiscal Policies at the Center for New York Affairs, say the programs are working off of a somewhat dated economic model, especially since he found that the city gave up almost $6 billion in tax revenue in Fiscal Year 2018 thanks to a stew of incentive programs like ICAP and REAP.

The predecessors to ICAP and REAP arrived in “a different historical economic context, coming on the heels of the 1970s when there was a lot of corporate headquarters movement out of New York City,” Parrott told Gotham Gazette. “With the loss of 600,000 jobs between 1973 and 1979, it was a really difficult economic period for the city. So in the 1980s the city put in place, and ramped up its commitment to subsidize corporations to stay in New York City, to relocate to New York City and to add employment.” But these days, Parrott says the city’s economy is healthy enough to function without massive incentives.

“We're now at a point where the total employment level in New York City is 4.3 million, almost 700,000 to 800,000 higher than it's ever been before,” he said. “Arguably New York City doesn't need to do anything to subsidize new economic development investments, given the very rapid employment growth we've had in recent years.”

Though he continues to stress that his administration refuses cash grants to companies, de Blasio also continues to defend the Amazon deal, including the use of the subsidies involved, again doing both during his weekly NY1 appearance on Monday. “[W[hat we need to move towards is a society where it’s not about cities competing” over companies, the mayor told host Errol Louis. “The specific incentives were automatic and part of state law,” was also part of his defense, and he suggested that if people want to see an end to the as-of-right programs, people should debate that in the future.

Parrott said he could understand the use of the Excelsior programs upstate, given the region’s struggling economy and what he said was a better oversight process than the program’s predecessor, the extremely troubled and criticized Empire Zone program. But the entire program also has an annual cap ($183 million in 2019 and steadily decreasing to $36 million in 2024 per the Citizens Budget Commission) that will have to be raised by the state Legislature if Amazon creates all of the jobs it’s promised, leaving Parrott to wonder, “why on Earth, if you have these limited tax credit resources, you spend those in New York City? The one place in the state that that least needs economic development subsidies?”

Kaehny sees some self-promotion as a motivating factor in giving state money to Amazon, specifically on the part of the governor. “Cuomo wants to create a narrative that shows that he had some agency, that he was the one that closed this deal with Amazon, that he did something that caused this deal to happen,” Kaehny said. “If Amazon says, ‘Well we don't care about the subsidies at all, we really just wanted New York City and this terrific dynamic place with a huge job market of talented people, the kind that we want working for Amazon and we don't really need subsidies,’ well then what's Cuomo’s role in landing the deal?”

It’s an especially pertinent question according to Kaehny and others who insist that Amazon was probably going to come to New York anyway. Both before and after identifying Long Island City as one of its landing spots, Amazon officials said that the ease of recruiting tech talent was the key ingredient in their search. A request for information that Amazon sent to Somerville, Massachusetts included one question about the incentive package the city could offer, but multiple questions about quality of life and the area’s working populations.

That in turn raises the issue of where New York should actually invest, in businesses or in infrastructure, according to Jonas Shaende, the chief economist at the Fiscal Policy Institute. “Should we just give [companies] tax subsidies outright or should we invest in what makes New York so attractive and so vibrant and so great? In the things that that are the real factors in in their decision making, things like the transportation system, the affordable housing the access to to labor, to education facilities those kinds of things.”

Shaende wasn’t alone in that line of thinking, as redirecting state subsidies from corporations towards local infrastructure was a centerpiece of the Marc Molinaro and Stephanie Miner campaigns for governor.

It’s real money
Another one of the governor’s defenses of the incentive package is that New York isn’t actually paying Amazon anything at all, but rather is letting the company pay slightly less in taxes than it would otherwise. In his “op-ed” published to the governor’s official website, Cuomo writes:

“Our proposal offered that, when and if those revenues are realized, the government would effectively reduce their $1 billion payment by about $100 million for a net to New York of approximately $900 million. New York doesn't give Amazon $100 million. Amazon gives New York $900 million.”

It’s a rhetorical sleight of hand that doesn’t pass muster with any expert Gotham Gazette spoke to. “I mean, that's just fundamentally wrong because essentially all economists left, right, wherever agree that a tax abatement or tax credit is a form of expenditure by government and is rightly called a subsidy,” Kaehny said, pointing out that the Governmental Accounting Standards Board (which sets the rules for financial reporting by government entities) now has a rule that counts subsidies as expenditures.

And in the case of the capital grant Amazon is getting, the cash is very much real. “It's clearly a case where it's a budget choice [Cuomo's] making, here's $500 million in taxpayer resources we're going to give to Amazon rather than use it for something else,” Parrott said.

“[Cuomo] happens to have a reserve of resources, out of which it’s very likely that this money is going to come,” Parrott said, talking about New York settlements reached with banks who are alleged to have committed mortgage securities and other financial fraud. “Although there wasn't anything said in the memorandum of understanding with [Empire State Development] and the state and the city that said where the capital monies are going to come from, my guess is it will come out of the reserve,” he said. Cuomo has indicated he does not need legislative approval for the capital grant, but legislators, especially those opposing the deal like Queens state Senator Michael Gianaris, are exploring all their options to block or change the deal.

The Citizens Budget Commission was measured in its critique of the grant, comparing the reimbursement-style payments as better than upfront costs the state has taken on with, for instance, the $750 million solar panel plant it built in Buffalo. But CBC still criticized the ongoing lack of oversight for where the money would come from. The grant has also been criticized in multiple corners as a sop to Cuomo-friendly construction unions, with critics charging the state is essentially paying Amazon to use union labor.

And the subsidies also open New York up to the double whammy of even more companies asking for the kinds of tax breaks Amazon is set to receive while at the same time trying to provide services and pay for them in a state budget operating under the governor’s self-imposed 2 percent cap on annual spending increases.

“It’s not a fiscally responsible way of running government,” Shaende said. “It could be potentially highly problematic for the state, because the state still relies on taxes. And we have the 2 percent spending growth cap, we have all sorts of measures that that the governor adopted to show that he's running a very fiscally responsible shop. He saves money, let's say, by cutting services, by finding efficiencies, in joint services between municipalities. So he saves, you know, a couple of nickels here a couple of dimes over there, and then he just splurges like this.”

Could this spur change?
As lawmakers scramble to find a way to stop or change Amazon’s incentive package, there’s at least some hope among reformers that the publicity surrounding the deal can lead to a change in how the state and city use tax incentives. The incentives all going towards one company has already brought more attention to the ways New York uses them than their use for the Hudson Yards development, Parrott said, despite the fact that “the total cost of the Hudson Yards tax breaks rival the amount of the city and state subsidy to Amazon.”

The surrounding outrage may also give new life to the proposed subsidy tracker known as the “Database of Deals,” an idea that Reinvent Albany’s Alex Camarda pointed out “is not rocket science” in Assembly testimony for more accountability in the state’s economic development funds last year. It is a transparency measure Comptroller Tom DiNapoli has called for but Cuomo has opposed; it passed the Republican-led state Senate earlier this year, but was not given a vote in the Democrat-led Assembly.

According to Shonede, the database not only could provide transparency to what’s going on in the state, but a better template for future spending.

“As a community of experts, we need to stress some basic accountability, how many jobs we get per dollar spent, and what kind of jobs they are,” Shoende told Gotham Gazette. “And if we do that, in a consistent and serious way, a basic accounting of these efforts, it’s going to be obvious that the best way to improve the situation with income inequality, and lack of good jobs in vulnerable communities and improving the business climate have to do with what the traditional role of the government is supposed to be. And that is making sure that people are safe, that they are well prepared for the market, and that the infrastructure is such that it minimizes the business costs for the businesses that you see operate in the neighborhoods,” he said.

And so in his own way, despite resisting intensive oversight of the state’s economic development initiatives, the governor may have inadvertently dragged the state’s subsidy programs further towards daylight. “This is kind of a like peeling the onion of Albany dysfunction and scurviness in a microcosm, this deal,” said Kaehny. “Because there's all this stuff baked in here that's been going on for a long time time. But it's like for the first time people in New York City were like ‘Oh s***,’ but reality is they've been doing this for many, many years.”

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by Dave Colon, Gotham Gazette
     

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Note: this article has been updated with more clear description of Amazon's eligibility for ICAP.

As Democratic Senate Becomes Reality, Unclear How Hard Assembly Majority Will Push Prior Agenda


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Assembly Speaker Carl Heastie (photo via the Governor's office}


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

As New York lurches out of election season and looks to what issues the state legislative session in 2019 could tackle, the Assembly is in an unfamiliar position as something more than a purgatory for progressive priorities. For years, the lower house of the Legislature was a place where progressive goals like criminal justice and voting reforms, the DREAM Act, the Gender Expression Non-Discrimination Act, the New York Health Act, and the Climate and Communities Protection Act could reliably be passed thanks to a huge Democratic majority. And every time those bills passed the Assembly, the state Senate, controlled by either Republicans or an alliance of Republicans and breakaway Democrats, would almost always keep the companion legislation in committee, far from a floor vote.

But with Democrats about to take control of the state Senate in addition to the governor’s mansion, the Assembly will in 2019 have a chance to actually see bills they’ve passed every year get a real debate in Albany. And advocates and activists are waiting expectantly for just that scenario to happen, their sense of urgency heightened in the Trump era, which led their efforts to help flip the state Senate so it is no longer a roadblock.

While the state Senate Democrats will not be in the same political universe as the outgoing Republican majority, the conference will still need to sort out its priorities, including how those of some of its tax-averse suburban and upstate members, who’ll need to win re-election in 2020, align with the city-dominated Assembly. One-party rule may not be the rubber stamp that Republicans warned it would be during the election, especially as the new state Senate majority will have to get its footing under a dominating and fairly moderate governor. Cuomo also campaigned for the newly-elected state Senators from Long Island, as well as the Hudson Valley’s Peter Harckham and Brooklyn’s Andrew Gounardes, which in theory, and his own telling, gives him some sway over them that may counteract the influence of grassroots activists who worked to elect a Democratic Senate.

By appearances, a wave of progressive legislation bursting out of Albany and washing over New York would be an expected natural occurrence. Democrats are in possession of a supermajority in the Assembly and Senate, one whose membership stretches from Suffolk County to upstate and western New York and whose new members did not shy away from embracing far-left progressive priorities like single-payer healthcare. Carl Heastie, once found to be one of the most liberal legislators in all of America, remains the Assembly Speaker, and Democrats have a 106-43 advantage in the chamber. One significant question now hanging over state government: how hard left will the Assembly push?

Their long-sought situation in the Legislature leaves progressive activists like Jonathan Westin, the executive director of economic justice organization New York Communities for Change, feeling hopeful for the session to come. “I think the Assembly has been committed to a lot of progressive legislation for a long time and we expect them to continue to do that,” Westin told Gotham Gazette. “A lot of the grassroots base is ready to push but at the same time we feel pretty confident that the Assembly is gonna go forward and pass a lot of these bills.”

In his first year as speaker, Heastie laid out a series of now-familiar priorities for the 2015 Assembly Democrats. Passing the DREAM Act, raising the state’s minimum wage, reforming the state’s rent laws in a more tenant-friendly direction. While the DREAM Act has still not come to the floor of the state Senate since a failed 2014 vote and the state’s rent stabilization laws were renewed but not drastically changed in 2015, progressives did see a victory when Cuomo prioritized and pushed through the Republican Senate a $15 minimum wage program of sorts in 2016.

Heastie used the 2018 legislative session to again push for the DREAM Act to become law, and also highlighted Assembly legislation to alter a suite of rent regulations essential to hundreds of thousands of units of affordable housing in New York City. Assembly Democrats also passed the New York Health Act, which would institute single-payer health care, for the fourth straight year in 2018, GENDA for the tenth straight year, major climate change fighting legislation (the CCPA) for the third straight year, and the Reproductive Health Act , which would codify Roe v. Wade into state law, for the fifth straight year.

What’s different about the upcoming legislative session is not only have Democrats captured the state Senate, but a good chunk of the new legislators going to Albany are staunch progressive voices who were sent to office by furious left-wing organizing both old and new.

Democrats like Zellnor Myrie and Jessica Ramos made things like major overhauls of the rent laws and repeal of the Urstadt Law, which keeps New York City from setting its own rent-stabilization laws, centerpieces of their insurgent state Senate campaigns. In the Hudson Valley, newly-elected Senators Harckham and Jen Metzger both embraced the New York Health Act as feasible and worthwhile, and DREAM Act-supporting activists from Make the Road Action, the immigrant and working class advocacy organization, helped power Long Island state Senator John Brooks and state Senator-elect Jim Gaughran to their swing-district wins.

On the other hand, there are already powerful figures in the party suggesting that long-sought leftist priorities are toxic outside of New York City, leadership in the Legislature will have to tamp down enthusiasm for any bills that might raise taxes, and Cuomo said in an interview that he thinks something like single-payer health care will get bottled up by the governing processes that separate campaign rhetoric from reality.

Incoming Senate Majority Leader Andrea Stewart-Cousins herself said “We’re not coming in there to raise people’s taxes,” in an interview on WBAI’s Max & Murphy. But she did also lay out priorities for the conference to start, naming things like reproductive rights, the Child Victims Act, and said, “I’m sure that will be able to do something about that early on” when it comes to instituting early voting in New York.

In the Assembly, Heastie sent out a list of priorities just after the election, a mashup of specific socially liberal and more vague fiscally liberal policies that are familiar to many. Called out by name for passage are the Child Victims Act, the Reproductive Health Act, banning gun bump stocks, speedy trial reform, and electoral  and campaign finance reforms like no-fault absentee voting, closing the LLC loophole, and early voting.

But while the speaker wrote that New Yorkers “deserve a healthcare system that guarantees coverage for all,” there’s no mention of the New York Health Act or the state-run single-payer system it would create. No specifics are listed for the rent reforms while Heastie states “The Assembly Majority is ready to pass legislation to extend and strengthen programs that protect low and middle income tenants to keep them from being priced out of their homes and communities,” (though Heastie reportedly told a pair of real estate representatives at the Somos conference that vacancy decontrol and preferential rent are history) and the DREAM Act is nowhere to be found, nor a mention of any environmental policy (though that isn’t a total aberration). Heastie's office declined an interview request, pointing Gotham Gazette to the speaker's post-election missive.

And even though some of the more famous liberal priorities aren’t mentioned by name, the focus on electoral reform appears to be a place where the base and the Assembly line up perfectly, with the upcoming Senate majority and Cuomo apparently in the same mindset, too, though the details will need to be hammered out.

Working Families Party political director Bill Lipton told Gotham Gazette that he doesn’t expect the Assembly’s “long, progressive history” to change under Carl Heastie and a new Albany order, and that he’s happy to see people willing to tackle electoral issues.

“We can't repair the damage unless we face head on the contradiction of financing election campaigns with wealthy donors who want tax cuts, contracts and loopholes for themselves,” Lipton wrote to Gotham Gazette in a statement. “The result both nationally and here in New York has been disastrous,” Lipton wrote, while highlighting a small-donor matching funds program that he hopes the state institutes now that there’s a Democratic trifecta. Campaign finance reform is something Cuomo has long-pledged support for, not moved through the Republican Senate, and promised to deliver with a fully Democratic Legislature.

Westin also endorsed a starting focus on electoral reform: “the one thing that's been in common in New York is the influence of real estate money and we have to clean it up once and for all. Carl and the Assembly have a real opportunity to do that, and I think is one of the biggest things that needs to happen quickly,” he said.

agenda19v2 aThere is some reason for progressives to have concerns in the Assembly though, according to Sean McElwee, the co-founder of progressive think tank Data for Progress. While McElwee pointed to the progressive wave that elected a large piece of the Democrats’ state Senate majority, that energetic mandate wasn’t seen in Assembly elections. “In the Assembly you've basically had a bunch of Democrats who were like the [Republican] House of Representatives under Obama. They kept passing an Obamacare repeal, and once it was time to pass it for real, there were some cold feet. I worry about that dynamic with the Assembly. When I've talked to the New York Renews coalition about the CCPA, they've said silently, ‘Yeah we're gonna have real problems in the Assembly when it comes time to pass this,’ and the same for Medicare for All advocates.”

It’s not an out-of-hand fear for progressives, who can look to neighboring New Jersey and the fact that legislators backed away from pledges to tax the rich and didn’t get a slam dunk on legalizing recreational marijuana despite Democrats having total control of the government.

But those activists who powered the anti-IDC candidates and Long Island Democrats to victories aren’t planning on sitting on their hands. “We may see some Assemblypeople who previously voted for some things be hesitant about putting their votes behind them,” Mia Pearlman, the co-founder of progressive grassroots organization True Blue New York, told Gotham Gazette. “So if it comes to that, we fully plan to be lobbying in Albany and on the ground in the district of any elected representative who we feel can be swayed, needs to be swayed, needs support, needs pressure to vote for legislation that we're supporting.” Pearlman did say that even though there might be some hesitant members, she felt that there were also plenty of members of the Assembly who were ready to get to work on passing the bills that had died in the Senate in past years.

While Pearlman echoed the call to tackle an issue like electoral reform early on, she also said she and her allies very much expect the Assembly to make reasonable progress on the other bills that have been stymied in previous years. On something like the New York Health Act, for instance, she said that while the bill doesn’t have to be passed for the sake of being passed, she wants to see an actual debate move forward on it to find the best way possible to provide universal comprehensive healthcare coverage, a line of thinking that aligned with Harckham’s call for hearings and passing a bill by the end of his first two-year term.

“The idea that it's somehow a victory for the Assembly to have such a big majority solely so they can say ‘Yay we have a majority’ is sort of absurd,” Pearlman said. “The purpose of having a big majority is to actually do something with it, to pass legislation, not just pat ourselves on the back and say ‘Look how many members we have.’ So we expect after all these years of waiting that they'll use that majority to write legislation and get things done.”

The Assembly could, in theory, pass the existing version of all of the bottled up left-leaning bills that haven’t made it out of the state Senate for years, and put the onus on the new Senate, as well as the governor. But it seems needlessly adversarial for the Assembly to get off on that kind of footing with a more ideologically similar Senate conference, which in all likelihood they’ll need in negotiations with a governor more prone to triangulation, political centrism, and describing his progressive opponents as “dreamers not doers” than he’s known for bold leftism.

The new situation in Albany is also an opportunity for government to work differently, Pearlman suggested, opening things up and making it more transparent, especially during the budget season. “We don't have to have three men in a room or two men and a woman in the room, that is not written in our state constitution that the budget has to be written at the last possible minute behind closed doors,” Pearlman said. “What we're hoping is that the conference leaders will look at the process of how things are done in Albany and demand they're done in a more transparent and more equitable and better way.”

At the moment though, Stewart-Cousins doesn’t seem keen on blowing up the process, as she told Max & Murphy, “I’m interested to see how this thing really works as well. I’m sure I’ll have a lot of opinions once I’ve actually been part of it,” in response to whether she plans to make the budget process more transparent.

Cuomo also campaigned on keeping state spending tethered to the (somewhat rhetorical) two percent cap he instituted during his first term, and has flatly said an additional tax on high-earners to raise revenue for the MTA will not be happening, even speaking for the Legislature before the next session has started. So as for what might make it through the budget, McElwee said he predicts progressives can get “one big budget-buster” through the process each year, and if he had to play favorites, he’d pick the Climate and Communities Protection Act. “For me and I think a lot of millennials, climate change is the biggest existential threat we change. And I think a policy that can mitigate that while also creating jobs and infrastructure would be a sort of progressive model for the county,” he said.

But ultimately, progressive activists say they aren’t taking anything for granted, even as people talk about the Democratic majority in the state Senate as a permanent one. “Politics is all about waves and momentum, and if you don't capitalize on the momentum you never know where you're gonna end up in the future,” Westin told Gotham Gazette. “I think our belief is we need to pass all the priorities this cycle, as you see even on the federal level and clearly in the state too, you never know what the next configuration is going to look like, and we don't want to waste this opportunity.”

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

***
by Dave Colon, Gotham Gazette
     

Read more by this writer.

Max & Murphy Podcast: Congestion Pricing & the MTA in 2019


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


November 21, 2018 - Max & Murphy Podcast: Congestion Pricing & the MTA - Looking Ahead to 2019

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

alex m dana rubenstein wbaiAlex Matthiessen of Move New York joined the show to discuss congestion pricing -- the policy details, political landscape and prospects for passage in 2019 -- and Dana Rubinstein of Politico New York joined the show to discuss the MTA -- subway service, leadership, and funding.

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

agenda19v2 a

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

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

Agenda 2019: Long List of Transit Questions Starts with Saving the Subways


gov an cuomo littering

Gov. Cuomo on the tracks (photo: Kevin P. Coughlin/Governor's Office)


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

2019 will be a pivotal year for New York City transportation, unlike any this city has seen in decades. Not only is there near-universal agreement that the city’s transportation landscape, from the subways to the buses to the traffic and everything in between, is fundamentally broken, there is also a growing consensus on many of the steps needed to fix it, starting with—but by no means limited to—congestion pricing.

The problems start, of course, with the subways. For the first time in a generation, there is a leader at the MTA, New York City Transit President Andy Byford, that activists, politicians, and the riding public believe in. And he’s getting results, at least enough of them to instill confidence in new-found competence. On-time subway performance has been steadily rising since a low of 58.1 percent in January to 70.3 percent in October. Overall delays are also trending in the right direction. The $836 million Subway Action Plan work has mostly been done, which also seems to have had an effect in reducing the number of “Major Incidents” that snarl commutes.

Byford and his management team are always quick to admit there’s still much more work to do, but his efforts to improve “the basics” by reducing train dwell times, making sure all of the safety equipment in the system works properly so trains can go as fast as safely possible, and other “safe seconds” initiatives appear to be paying off.

On top of that, the state Legislature, which has final say on many of the key issues facing the city’s transportation landscape, turned solidly Democratic in November, opening the door to changes that may otherwise have been off the table. Some legislators at least appear eager to tackle the transportation issue head-on. Plus, Corey Johnson, the City Council speaker, has made transportation a key tentpole issue of his early tenure by passing a temporary Uber/Lyft cap and the Fair Fares program for discounted MetroCards. In many ways, the stars are very much aligned.

But the challenges are just as monumental as the opportunities. The MTA has a precarious financial situation, ridership is declining, and some miscalculations now such as cutting service or raising fares too high could have dire consequences. Congestion pricing still has its detractors, particularly in the outer boroughs who, reasonably, want commitments to better bus service in exchange. They need to be convinced. The city’s mayor, Bill de Blasio, is still curiously indifferent to all things transit with the exception of his beloved ferries, a tiny, heavily-subsidized slice of the overall pie, and his still-far-off BQX streetcar.

And the single most important person in this conversation, Governor Andrew Cuomo, has been too selective regarding what MTA issues he’s interested in and when, resulting in a revolving door of MTA leaders, whom Cuomo appoints. The agency needs a consistent, dedicated head who can team with Byford for long-term fixes. Cuomo will soon nominate someone for the position after Joe Lhota’s departure.

A year from now, we’ll probably have a pretty good idea of what the future of the city’s transportation will look like. Perhaps decades from now, New Yorkers will look back on 2019 as the year the tide finally turned towards real fixes for the beleaguered transit picture, with a reliable subway system, buses that move, and other essentials. Or, despite the crises and challenges New York faces, maybe it will be perceived as a missed opportunity.

The L Train Shutdown
Believe it or not, the L train shutdown, that dark specter of fear and misery looming in the distance for years, is finally upon us. Starting on April 27, the L train will run at a reduced frequency and only in Brooklyn, diverting almost 300,000 riders per day. The MTA and NYC DOT have created an elaborate mitigation plan they claim can accommodate every rider. The agencies anticipate four out of every five displaced L riders will use other subway routes (most notably the J, M, Z, G, 7, E, A, and C) and the rest will use some combination of special bus services across the Williamsburg Bridge, ferries, or bikes; 14th Street will become a busway for most of each day and the Williamsburg Bridge will be HOV-3 to accommodate all those buses.

But there is simply no way to have hundreds of thousands of commuters change their habits all at once in an orderly fashion. The big question, then, is how the MTA and DOT adapt.

“We'll be watching closely to see whether the MTA and DOT can work together to adapt to real-world transportation needs on the ground,” said Hayley Richardson of TransitCenter. Some of the adjustments they’ll keep an eye on: will the HOV-3 window on the bridge, from 5 AM to 10 PM, be sufficient? Will HOV-3 in general be restrictive enough, given that their modeling largely uses assumptions from crises before Uber and Lyft had shared-ride options and thus could easily meet the HOV-3 restriction? Perhaps they’ll need to institute pop-up bus lanes created with standard issue road cones.

Another looming question is whether the HOV-3 restriction and bus lanes will be properly enforced. Given the volume of buses the MTA expects to run across the bridge and 14th Street—one or two buses per minute in some cases—even one blocked bus lane could be catastrophic during peak hours. It’s up to the NYPD to enforce it, and there has been little indication that the department prioritizes such work.

Whatever the case, riders—whether former L commuters or those on the lines that will be swamped with more passengers—are going to be dealing with a lot of changes. Will the MTA be able to communicate effectively? It, too, has left a lot to be desired in that department.

There’s a lot riding on the MTA and the city to get this right. Aside from the obvious need to get people where they need to go, it is a huge opportunity for the MTA to show riders it is improving, deserves more taxpayer and rider money, and will use it wisely because it is a competent, efficient organization. Because, well, the MTA is going to be asking for a lot of money.

Sorting Out the MTA’s Budget Mess
Earlier this month, MTA Chief Financial Officer Bob Foran presented a sobering financial picture to the MTA Board. In short, the MTA projects a $991 million deficit by 2022 even with biennial fare and toll increases. Foran argued the MTA needs a new, recurring revenue stream in order to balance the budget beyond 2020. And this is just the MTA’s costs of providing day-to-day service; the next five-year capital plan—which would include Byford’s Fast Forward Plan to revitalize New York City Transit, plus the needs of LIRR and Metro-North—is estimated to cost around $60 billion, or nearly double the current capital plan. Who will pay for it and how is the single biggest question facing New York City transportation this year.

For his part, Cuomo has been consistent on one MTA issue: he wants the city to pay more. He wanted the city to pay more in 2015 towards the current capital plan, he forced the city's hand into paying half of the Subway Action Plan, and he regularly pledges—and had suburban state Senators sign on—to make the city pay its “fair share” going forward.

Before Lhota resigned as MTA chair earlier this month, he stated the Board would not take a position regarding preferred revenue streams until the MTA Sustainability Advisory Working Group, created by this year’s state budget, issues its report on this topic, which is expected by the end of the year. That report will likely set the tone for discussions in Albany once the new legislative session begins in January, which is largely dictated by the governor’s State of the State address and Executive Budget presentation.

In the meantime, Governor Cuomo declared on WNYC’s Brian Lehrer Show on Monday that “the MTA is going to be a top priority for me this year” and that he favors congestion pricing as the additional revenue stream in need.

Congestion pricing, which would charge drivers who enter Manhattan’s Central Business District, will accomplish far more than give the MTA additional money (perhaps more than $1 billion per year depending on what the exact model looks like). It will also address one of New York’s other major transportation issues: traffic. According to the FixNYC panel convened by the governor last year to study congestion pricing, vehicles in the Central Business District moved at a mere 6.8 miles per hour in 2016, and only 4.7 miles per hour—a brisk walking pace—in the “Midtown Core.” By reducing the number of vehicles in Manhattan, congestion pricing would help speed things up.

Because of the MTA’s dire financial outlook and Manhattan’s desperate need for traffic relief, congestion pricing is a two-birds-one-stone type deal. Combined with a revamped state Legislature more amenable to congestion pricing, there’s a growing consensus it will pass this coming session.

“We certainly expect to see congestion pricing done this year in the budget process,” Tri-State Transportation Campaign executive director Nick Sifuentes predicted, before adding “and we also know additional resources of funding will be necessary if we’re going to see Fast Forward fully funded.” What those additional revenue sources might be is a question the MTA Sustainability Advisory Working Group will presumably address.

MTA Cost Control
But that’s just the revenue side of the equation. The MTA also has a highly-publicized cost control issue, spending orders of magnitude more on big projects than comparable cities. It’s a problem Cuomo has finally vowed to tackle. “There is inefficiency that goes on at the MTA that has to end,” he told Lehrer. Easier said than done, especially for a governor who has been extremely tight with the Transportation Workers Union and taken little apparent interest in how MTA contracting is managed.

While the MTA has said that tackling high capital costs is a key goal for almost a year now, there has so far been very little payoff. Presentations by the MTA Board’s procurement and cost containment task forces in June have been the only public-facing initiatives within the authority to keep the ball moving forward. Nor has there been any transparency on why, exactly, the Fast Forward Plan will cost $40 billion, how that number was arrived at, or whether the cost can be lowered by prioritizing some initiatives over others.

The MTA will also be re-negotiating its biggest labor contract with TWU Local 100 and its more than 40,000 members, whose contract expires in May. Payroll, health care, and pensions account for more than half of the MTA’s $16.7 billion 2019 budget.

The main question is to what degree lawmakers will push the cost control issue when determining new revenue streams in the upcoming state budget. Will they insist on rigid cost containment guards to make sure the money is spent wisely? Or will they throw a bunch of money at the MTA and hope the problem doesn’t present its ugly head again until they’re long gone from office?

The latter approach may be the more cynical one, but it’s also the historically preferred one in Albany. Nevertheless, Assemblywoman Amy Paulin has already vowed to break form and “conduct [a] rigorous, public oversight during the legislative session” on the MTA. Danny Pearlstein of the Riders Alliance expects lawmakers this time around to take a more active approach in ensuring the MTA is doing something about outsized construction costs. “Lawmakers and fare, toll, and taxpayers want to know that the money they raise and set aside for transit will be used efficiently and responsibly,’ Pearlstein said. “Ramping up toward the next MTA capital plan, look for the authority to articulate and implement new cost control measures.”

Get Buses Moving Again
For all the talk of fixing the subway for tens of billions of dollars, fixing the city’s bus service—which serves almost two million riders a day but has seen ridership plummet by almost 10 percent since 2012—is a relatively cheap and easy proposition by comparison. Instead of a matter of dollars, it’s largely a matter of will.

Congestion pricing would likely help speed up bus service in some parts of Manhattan, but more needs to be done to make bus service throughout the five boroughs an attractive option, say both Sifuentes and Pearlstein, whose organizations have partnered with other advocacy groups to form the Bus Turnaround Coalition. The coalition calls for, among other measures, redesigning the city’s bus routes, which in many cases have not been touched in decades. The MTA just finished redesigning Staten Island’s express bus network and plans to tackle the Bronx next.

But it’s not just an MTA problem. The roads and traffic signals are controlled by the city DOT and monitored by the NYPD, and thus far Mayor de Blasio has not made speeding up bus service a priority—or even a topic—of his administration’s efforts. “The city (DOT) really needs to step up its commitment on buses,” Sifuentes urged, which he says ought to include more bus lanes and more robust and expanded transit signal priority, which gives buses as many green lights as possible.

There is something Albany can do, which is probably the most important thing to speed up buses. Both Pearlstein and Sifuentes plan to pressure the state Legislature to drastically expand the use of camera enforcement for bus lanes rather than relying on the NYPD to write tickets. For his part, Byford wants those cameras mounted on the front of buses, ensuring anyone who blocks a bus lane gets a ticket regardless of whether or not there’s a cop nearby.

agenda19v2 aNew Fare Payment System
The Bus Turnaround Coalition also calls for all-door boarding to speed up loading times, which can only be done with a new fare payment system. Luckily, the MTA is mere months from introducing this.

Starting in May, riders will be able to use contactless payment such as Apple Pay, Google Pay, or contactless-enabled credit cards that Chase and Visa will be rolling out in the coming months, to pay their fare on the 4/5 subway line between Grand Central and Atlantic Ave/Barclays as well as Staten Island express buses. The MTA plans to roll out contactless payments to every other bus and subway station by October 2020. By the time MetroCards are no longer accepted in 2023, riders who don’t have credit cards or smartphones will be able to purchase NFC-enabled transit cards like the ones in Chicago, Washington, D.C., Los Angeles, London, and pretty much every other major city from new station vending machines and local stores.

This new payment system will not only make bus boarding faster if implemented properly, it can also accommodate a more sensible fare structure that eliminates the need to face the existential question of adding value or adding time. This model, known as fare-capping, means people pay per-ride until they hit a pre-determined maximum for a period of time, perhaps a day, week, or month, at which point each additional ride is free for that time period. This ensures nobody pays more than the “unlimited” amount and further incentivizes folks to use public transportation no matter how many trips they plan to make.

Although fare-capping can’t happen until every subway station and bus has the new fare payment system in 2020, the 4/5 line rollout will be something to watch next year, particularly in concert with the city’s Fair Fares program that gives half-priced MetroCards to low-income New Yorkers. Going forward, contactless payments would make implementing that system simpler and cheaper. Although it’s not getting nearly as much attention, the New Fare Payment System may well be the most transformative change for the city’s transportation next year.

Other Important Transportation Issues on the Table, But with Less for 2019
-With the House flipping Democratic, there is slightly more reason for optimism that something—anything—might develop in securing funding for the $30 billion Gateway project, although President Trump would have to renege on his vow to veto any federal funding for the project. It would be nice if they also found ways to reduce that price tag, too.

-2019 will likely see a series of “announcements” by Cuomo about progress on Penn Station’s redevelopment, but none of the major renovation projects such as the Moynihan extension are scheduled to be completed until 2020.

-Placard abuse continues to run rampant throughout the city, with little attention from Mayor de Blasio, who has repeatedly vowed to crack down on the widespread practice and repeatedly failed to do so. Reining in this overtly corrupt practice would do wonders for city streets, but there’s no reason at this point to believe 2019 will be any different than previous years.

-Returning to Fair Fares, which is designed to provide half-price MetroCards to low-income New Yorkers, the program is set to begin in 2019. It’s widely seen as a major step forward for the city, but some questions linger, such as how smoothly the implementation will go and whether there will be an option for single-ride Fair Fares down the road, since the initial program will be limited to seven-day and 30-day passes, an issue advocates and some elected officials have said needs to be solved.

-For Long Island commuters, two massive improvements are on the distant horizon—East Side Access and Third Track—but both are still years away, with scheduled completion dates of December 2022. Again, progress worth monitoring along with and aside from inevitable Cuomo “announcements.”

-That point also applies to LaGuardia Airport, which will still be a lot of trouble in 2019 and probably for much beyond, too. Terminal B, the center of the new design, won’t open until 2020 and Concourse A won’t be done until 2022, but work is ongoing the governor will be there.

-And the city’s much-maligned streetcar project, the BQX, is still technically alive despite needing $1 billion in federal funding to become a reality, according to city officials who have changed their tune on funding since de Blasio announced the BQX in 2016. Don’t expect much if anything to change in 2019, as the Friends of the BQX’s own timeline says the city won’t complete its Environmental Impact Statement process until September 2020.

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

***
Aaron Gordon is a freelance journalist and founder of Signal Problems, a weekly newsletter about the subway. On Twitter @A_W_Gordon



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