Gotham Gazette

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What Adams Did and Didn't Get in His First State Budget as Mayor

Mayor Adams in Albany (photo: Michael Appleton/Mayoral Photography Office)

Governor Kathy Hochul and the state Legislature delivered a $220 billion state budget over the weekend, nine days late and packed with last-minute additions that proved controversial, including changes to state bail laws and a massive state subsidy for a new Buffalo Bills stadium upstate. For Mayor Eric Adams, it contained funding and policy decisions to meet some of the new mayor’s major priorities, while not fulfilling other aspects of his state agenda. 

Testifying before the State Legislature in February, Adams had called for several proposals in his “People’s Plan” that he released during his campaign and which he has repeatedly spoken about as mayor. He pushed for rolling back parts of recent state criminal justice reforms, an expansion of child care funding, increased tax credits for low-income families, changes to state mental health laws, and the reversal of certain cuts and cost shifts imposed on the city by the state.

In his testimony, Adams mentioned several pieces of Hochul’s executive budget, released in January, that he agreed with and wanted to see in the final budget, but not all of those items were secured in the final deal. That sets the stage for additional negotiations among the parties during the upcoming two-month legislative session.

After the budget deal was announced, Mayor Adams, a Democrat just over 100 days into his tenure, celebrated aspects of it that accomplished his goals while promising to continue fighting for policies that were excluded.

“New Yorkers need help, and thanks to our leadership, the state budget included huge components of my ‘People’s Plan for New York,’ which will put hundreds of millions of dollars in the pockets of working class New Yorkers,” Adams said, in part, in a statement. 

“I commend the governor, the Senate, and the Assembly for their work, even while we acknowledge that we have far more work to do on key areas of public safety, housing, mayoral accountability [of city schools], and more in the ongoing legislative session,” added Adams, a former state senator with a great deal of familiarity with the state budget process.

Child Care
Adams has spoken of “universal child care” as one of his top priorities and the state budget included measures to help him expand towards it at the city level. According to the governor’s office, the budget includes $7 billion for child care subsidies over the next four years, more than double the current funding, increases reimbursements for child care providers, and includes $343 million for a second round of provider stabilization grants to help providers and child care workers. 

The budget also gave the city authorization to issue property tax abatements to property owners who retrofit spaces for child care centers, which the Adams administration predicts will create nearly 11,000 child care seats. And it allowed the city to provide a tax credit to businesses that give employees free or discounted child care, which could create another 6,600 child care spots. Both tax policies were presented by Adams as top priorities in his February testimony.

The state also allocated $15.6 million to help establish child care centers on all remaining SUNY and CUNY campuses where they do not exist.

Earned Income Tax Credit
The Earned Income Tax Credit is a crucial tool to aid low- and moderate-income families and the state budget and the city provides a match of up to 5% of the federal credit to its residents. At Adams’ urging, the budget expanded the city’s EITC for the first time in nearly 20 years to an up to 30% match, which is projected to lead to $250 million in additional city spending on the credit each year. He had also called on the state to match that spending with $250 million of its own funds and the budget did include state funds to provide a one-year supplement​al payment worth 25% of the state's ​Earned Income Tax Credit federal credit.

Adams’ main state-level priority on the education front appears to be a four-year extension of mayoral control of New York City schools. When he testified before the state Legislature in February, he made little mention of how he will handle the city’s school system and made only a very brief appearance at a subsequent legislative hearing focused on mayoral control of the school system, upsetting legislators.

The budget did not, however, include an extension of mayoral control of city schools. Governor Hochul proposed a four-year extension for Mayor Adams, which is longer than his predecessor ever received and Adams echoed in his state budget testimony, but the measure was dropped from the deal.

Adams must now press for an extension before the Legislature ahead of the law’s June 30 expiration. Most parties believe that mayoral control of city schools will be extended, but there may be some adjustments to the law, such as decreasing mayoral power on the city’s Panel for Educational Policy. 

“We will get mayoral control done by the end of the session, when it expires,” Hochul promised in a post-budget interview on PIX-11. “No doubt about it.”

Though the state budget will increase funding for charter schools, privately-run public schools that receive state funding, legislators did not touch the cap on charter schools. There are currently 460 charter schools allowed across the state, including 290 in New York City, a cap that has already been met.

Adams has been supportive of charter schools but he has not made it a focus. During his budget testimony he did not call for the cap to increase but he did call for so-called zombie charters -- those issued but since revoked or given to schools that have closed -- to be reissued to new applicants to open charter schools. The state budget deal did not include any action on zombie charters either.

The state budget provides $31.5 billion for school aid to localities across the state, an increase of $2.1 billion, or 7.2%, to the highest level ever. That includes a $1.5 billion, or 7.7%, increase in Foundation Aid for the state’s neediest schools, most of which are located in New York City. 

The budget also increases statewide funding for universal pre-kindergarten by $125 million or 13% for a total of $1.1 billion annually, $240 million in additional funding for special education schools, $100 million over two years for student wellbeing and learning loss from the pandemic, measures to recruit and retain teachers, zero-emissions requirements for new school bus purchases, and more. 

The budget proposes a $4.2 billion Clean Water, Clean Air and Green Jobs Environmental Bond Act, which will head to a ballot referendum in November. The Act will provide $500 million to help school districts buy zero-emission buses and will also fund the Clean Green Schools initiative aimed at improving indoor air quality and cutting emissions in K-12 public schools in disadvantaged communities. 

The SUNY and CUNY systems will receive a major infusion of $500 million in additional operational funds including $53 million for CUNY to hire additional full-time faculty, and a $110 million more to fund fringe benefits for SUNY and CUNY staff. The budget also provided $150 million to expand the Part-time Tuition Assistance Program (TAP), and averted an $80 million drop in funding for community colleges from falling enrollment.   

Another $2.2 billion in capital funding was allocated for infrastructure projects including $879 million for CUNY senior colleges and $102 million for community colleges across the State. 

Criminal Justice and Public Safety
For months, Mayor Adams has pushed the Legislature to roll back or change certain criminal justice reforms that he said have contributed to a recent spike in violent crime in the city, though there is little evidence to support such claims. He primarily wanted changes to the state’s bail law. Though he supports eliminating cash bail, he also wants judges to be able to consider a “dangerousness standard” when deciding whether to remand a defendant in custody pre-trial. Legislative leaders pushed back against the mayor’s proposal but he had support from Governor Hochul for toughening the law.

The final budget deal did not include a dangerousness standard but did tighten the bail law somewhat by increasing the number of bail-eligible crimes, enhancing the law to account for repeat offenders and giving judges more discretion in setting bail. There were also minor but significant changes to the state discovery law, which Adams had blamed for slowing down prosecutions and district attorneys have said has led to dismissed cases based on unnecessary technicalities.

Adams had also wanted the Legislature to change the Raise the Age law, which lifted the age of adult criminal responsibility to 18 years old. The mayor wanted to give prosecutors the ability to charge youth under the age of 18 who are arrested for gun possession in criminal court rather than family court. But there was strong pushback against the idea and it did not make its way into the budget. There was a small change that closed a loophole in the law giving Family Courts jurisdiction over cases when 16- and 17-year-olds are charged with an offense but not arraigned until they are 18.

The budget also includes $224 million for gun violence prevention programs run by law enforcement and community-based organizations.

“[W]hen you look at public safety, while I commend the Governor and lawmakers for some of the proposals that they've made, which many people stated was impossible when I went to Albany. But it's clear we have a long way to go,” Adams said in a WNBC-4 interview on April 8. “This is only halftime. We have an entire session left and I'm going to continue to push towards some of those important initiatives of how we help the police department continue to make this a safe city.”

Pandemic Recovery
Governor Hochul had set aside $2 billion to spend in unspecified areas to ensure the state’s continued recovery from the pandemic, saying in her executive budget that it would be negotiated with the Legislature.

The final budget deal allocated the money to various purposes that are likely to impact New York City. It includes $800 million for the Emergency Rental Assistance Program (ERAP), $800 million for cash-strapped hospitals, $250 million for utility arrears assistance, $125 million in homeowner and landlord assistance, and $25 million in other one-time programs.

Like with other allocations, a significant portion of these funds will wind up in New York City, which accounts for roughly 40% of the state population.

Mental Health Policy
Mayor Adams had called for an expansion and strengthening of Kendra’s Law, which provides for mandatory assisted outpatient treatment (AOT) for people with severe mental illness. The budget did include changes to the law to make AOT orders more effective and to improve coordination between treatment providers. The budget also included a provision that allows judges to require mental health screenings of people involved in the justice system before pretrial release. 

The mayor had also called for immediate state funding for hospital beds for New Yorkers requiring emergency mental health care and additional funding for mental health support staff. Those demands were broadly met in the budget, which made a series of investments in mental health services including $35 million for the launch of the 9-8-8 suicide prevention and behavioral health crisis hotline, $55 million for hospitals to restore up to 1,000 inpatient psychiatric beds, $11.3 million to launch the Governor's Safe Options Support (SOS) homeless outreach teams, $12.5 million for 500 dedicated scattered site supportive housing beds, and more. 

Adams had sought several measures that would help spur affordable housing creation in the city and beyond, especially in the suburbs where new housing has been severely limited. He wanted the legalization of basement apartments and Accessory Dwelling Units (ADUs), help to convert unused hotels and office buildings into 25,000 units of permanent supportive and affordable housing, and eliminating the cap on Floor Area Ratio (FAR) in the city to help build new housing more densely.

The governor dropped a proposal to legalize ADUs in the budget but did include $85 million to help bring ADUs into code compliance statewide. Her proposal to eliminate the FAR cap was also left out. The budget does include $100 million in capital funds to convert hotels and offices into affordable housing through the Housing Our Neighbors with Dignity Act (HONDA). But those conversions involve complicated issues around zoning and building code regulations and the money has been largely untouched since it was first approved last year.  

The budget included a $25 billion five-year housing plan with new funding for affordable, supportive, and senior housing. According to the mayor’s office, it will deliver $1.1 billion in capital funding for the New York City Housing Authority (NYCHA). There were other statewide investments that may also help the city including $50 million for land banks to buy and develop vacant or abandoned properties, $35 million for an Eviction Prevention Legal Assistance Program, and $35 million for the state's Homeowner Protection Program.

Adams had also supported the governor’s proposal to replace the soon-to-expire 421-a housing tax credit, which has cost the city billions of dollars for limited affordable housing, with a new 485-w program, which would have required deeper affordability from developers availing of the controversial credit. But that proposal proved contentious, particularly among progressives who believe it amounts to a continued if slightly improved giveaway to major real estate interests, and it was ultimately excluded from the budget. Some version of the credit will be among Adams’ top priorities in the legislative session that runs until early June.

Besides climate infrastructure, there are major projects coming down the pipeline that will have significant impacts on the city. 

The budget included a $32.8 billion, five-year infrastructure plan for the Department of Transportation that particularly focuses on roads and bridges across the state. In the city, it will fund the reconstruction of the Bruckner Sheridan Interchange at Hunts Point in the South Bronx, scheduled to be completed by the fall of 2025, and a feasibility study on covering sections of the Cross Bronx Expressway.

The budget also includes funds for the planned redevelopment of Penn Station and its surrounding areas, a controversial proposal first put forward by Hochul’s predecessor and modified by her administration. Questions have been raised about the financing of the project by legislators and the Adams administration, and opponents have criticized the amount of property tax breaks it will provide to a major real estate developer seeking to lead the building of a number of office and residential towers in the area. But Empire State Development, the state authority leading the project, has claimed that the project will bring in enough revenue to replace the lost revenue to the city and then some.

Governor Hochul has also proposed a new Interborough Express rapid transit project to connect transit deserts in Brooklyn and Queens. But the budget did not include any specific capital funding for the project that is meant to connect 17 existing subway stations along a 14-mile stretch.

Downstate Casinos
New York State had a moratorium on awarding three new casino licenses that was meant to extend for another year but the state budget lifted it, which could mean that New York City will soon be home to its first full-fledged casinos. Mayor Adams did not speak of casinos in his budget testimony but he has welcomed the prospect as a boon to the city’s economy. “We would love to have two [casinos] in New York City,” Adams told reporters, just days before the budget was due.   

According to the New York Times, the licenses will be awarded through a competitive bidding process and each license will cost an operator a minimum of $500 million. The new budget also included language setting up a casino siting board to approve or reject casino proposals, made up of appointees of the governor, mayor, and local elected officials including state legislators, borough presidents, and City Council members.

The budget extended the city’s design-build program, which cuts the cost and timeline of infrastructure projects, for five more years and additionally added the city’s Department of Citywide Administrative Services (DCAS) to the list of entities allowed to undertake design-build, for green infrastructure projects.

NYC Borrowing Capacity
The mayor asked the governor and Legislature to allow New York City an additional borrowing capacity of $19 billion to fund infrastructure projects, after the pandemic reduced property values in the city and therefore its related ability to incur debt. The proposal, opposed by City Comptroller Brad Lander as premature, was left out of the state budget.  

Distressed Hospitals Fund
The mayor pushed the state to refuse to permanently extend a Sales Tax Intercept for the state Distressed Hospitals Fund – Adams said the extension could cost the city about $200 million each year, after having already sapped $400 million in revenue from city coffers. He also wanted revenue already collected to flow to NYC Health+Hospitals, the city’s municipal hospital system. 

Adams won a partial victory as the budget reduced the amount of revenue taken from the city from $200 million to $150 million.

Other Issues
Adams had called on the Legislature to give New York City “home rule” over its speed limits and traffic cameras but that request was not approved in the budget and could be a matter he takes up in the legislative session to follow. 

The mayor had called on the state to fund an increase in the foster care subsidy rate for localities, but that request wasn’t approved in the budget, which will force the city to bear the added cost of $117 million. 

There were also additional cuts and cost shifts to the city that the mayor unsuccessfully fought against, including $204 million in annual costs for the Temporary Assistance for Needy Families program, $59 million annually for Article 6 Public Health Funding, and $30.5 million each year for the Close to Home program.

The state budget includes a provision to expand Medicaid coverage for undocumented seniors 65-years-old and up and new mothers at a state cost of roughly $100 million. While that provision fell well short of what some legislators and immigrant advocates wanted, the compromise will help many New York City residents. The mayor did not discuss the “Coverage for All” proposal in his state budget testimony, but several of his commissioners put out a pre-budget joint statement expressing support for the proposal to expand health coverage for all undocumented New Yorkers.

The state budget also authorized the sale of to-go alcoholic drinks for three years, an initiative said to have served as a lifeline for bars and restaurants during the pandemic and likely a boon for New York City’s nightlife sector. Adams expressed support for the proposal and has remained a steadfast supporter of the sector.

by Samar Khurshid, senior reporter, Gotham Gazette

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