Gotham Gazette

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As State Budget is Negotiated, A Closer Look At Mayor Adams' Albany Agenda

Mayor Adams & Governor Hochul (photo: Ed Reed/Mayoral Photography Office)

With a new state budget entering final negotiations, Mayor Eric Adams traveled to the state capital this week to pitch Governor Kathy Hochul and the State Legislature on his administration’s fiscal and policy priorities. Funding for migrant asylum-seekers and the MTA as well as other fiscal matters remain at the top of his list as the mayor has otherwise presented a limited policy agenda in Albany amid attempts to recalibrate his relationship with legislative leaders.

Last year, Adams’ intergovernmental and Albany operation seemed under-developed as the former state senator managed his first state budget process as mayor. Adams’ approach to state lawmakers, including the Democratic majority leaders, was the source of significant criticism, even as he developed a strong working relationship with Hochul.

Some of his top priorities, particularly an appeal to overhaul signature state bail reforms, received a cold welcome and the mayor was faulted for limited communication with many of his fellow Democrats as he also sought an extension of mayoral control of city schools, and more. Adams came away from his delayed first trip to Albany as mayor fuming not at legislators but at the media coverage that highlighted his halting efforts pitching his agenda.

Eventually, when the budget was approved and in the legislative session that followed, Adams did claim several victories, especially in concert with Hochul. Adams won major investments in child care, an increased Earned Income Tax Credit, expansion of the city’s speed camera program, a new ‘preservation trust’ to raise needed money for public housing improvements, and more. But he only received a two-year extension on mayoral control of city schools, rather than the four he wanted, along with a mandate to cut down on class sizes that he opposed. His push for a replacement of the now-expired 421-a affordable housing tax credit also failed. And his calls for a major revamp of bail laws were rejected in favor of moderate changes for which he could claim some credit. But overall, Adams appeared to get off on the wrong foot with many members of the Legislature, including the legislative leaders whose allyship he needs.

This year, Adams has been focused on pushing back against a series of cuts and cost shifts proposed by Hochul that he says will cost the city billions of dollars each year. And he has taken a different approach, taking apparent steps to reconcile differences with Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie, the top Democrats whose assistance is crucial to Adams’ goals.

The mayor’s main priorities have been well-publicized. He wants more funding to help provide shelter and other services to tens of thousands of asylum -seekers, to avoid a major cost shift for the MTA that could cost the city $500 million more annually, and to beat back a variety of other Hochul proposals that could cost the city money. While the mayor is supportive of expanding charter schools, as the governor has called for, he has said that any such growth in the sector should be accompanied by state funding to help pay for the schools’ rent.

But there are also several other issues Adams is pressing for, such as proposals in the governor’s housing agenda, and other items that have flown under the radar, including an expansion of health care to undocumented immigrants, expansion of the Child Tax Credit and Earned Income Tax Credit, changes to procurement and other regulatory matters in order to help complete infrastructure projects more efficiently, community hiring legislation, and an “income disregard” proposal for public benefits.

Asylum-Seeker Funding
The costs of the migrant asylum-seeker crisis have ballooned and Adams has continued to make it his top priority. His administration estimates that it will cost the city about $4.2 billion in the current and next fiscal years. And those costs have put pressure on the city’s finances ahead of its own budget deadline for the July 1 start to its fiscal year.

Hochul has proposed about $1 billion to the city, which Adams insists will not be enough, forcing the city to cut from departments and services. The city also doesn’t expect additional funding from the federal government before the current fiscal year is over, even as Congress appropriated an $800 million pot of funding in December to help cities across the country deal with an influx of migrants.

“I've always stated that the top issue for us I think that will undermine our city the most is the migrant issue,” Adams told reporters in Albany on Monday. The challenge also has the potential to deepen starting in May as the federal government is aiming to lift Title 42, a pandemic-era immigration policy that expelled more than 2 million asylum-seekers at the border. “We have to find an additional $4.2 billion. That is going to really undermine our city. That's going to impact every service that we have,” Adams said.

The mayor has also pushed back against a proposal in Hochul’s executive budget that would require the city to provide an additional $500 million annually in operational assistance to the MTA. That funding would cover the state’s share of the cost of the city’s paratransit program and discounted MetroCard program for students, she said.

The mayor and his administration have argued that the actual costs would be closer to $526 million in the next fiscal year and more than $540 million every year after that, on top of the $2.4 billion that the city already puts into the MTA — not to mention all of the other ways in which city residents and businesses fund the transit authority. The mayor was met with receptive ears among Democratic lawmakers: both the Senate and Assembly rejected the governor’s MTA funding proposal in their one-house budgets.

“[H]alf a billion dollars is just something that we cannot take on at this time,” Adams said. “And both houses heard us and in their one-house proposals, they came up with counter proposals and now it's time for the deliberation process to take place.”

Charters Schools
The governor’s proposal to eliminate the cap on charter schools in New York City has become one of the more heated points of contention in this year’s budget negotiations. Hochul has argued that the privately-run public charter schools offer choices she wants to provide to parents while many Democratic legislators are opposed to the largely non-unionized schools.

But both legislative chambers omitted her proposal from their one-house budgets and even Adams, a proponent of charter schools, has argued that the state must help the city with the projected $1 billion price tag associated with the measure if it were to pass. According to state law, the city must pay rent in private buildings for charter schools if no public space is provided.

Though he has not been especially vocal about it, Adams has been generally supportive of Governor Hochul’s proposed “Housing Compact,” a broad policy agenda that aims to build 800,000 new homes across the state over the next ten years.

“We have to build more and we have to find the pathways to build more low-income, middle-income, and market rate, all three of them, and that is what our plan is looking at,” he said at a housing-focused forum hosted by WNYC radio last week.

Adams is pursuing his own housing plan, somewhat reliant on state action, and there are several items in the governor’s housing proposal that he has been specifically lobbying for including easing conversions of underutilized office space to housing; eliminating the floor-area ratio cap to allow denser buildings in the city; a replacement for the 421-a tax credit that encourages apartment building development with some affordable housing included and an extension of the completion deadline for existing projects to receive 421-a benefits; replacing the expired J-51 tax incentive, which helped property owners renovate housing in exchange for making it affordable and new safety standards for basement and cellar apartments.

“We need to have a real conversation about 421-a, a real vision of it, we need to look at J-51. There are things that is taking place right now in Albany,” he said at the WNYC forum. “And I really take my hat off even to the governor, what the governor's doing about regional [housing]. We need to look at the region because this is a regional problem.”

According to a City Hall spokesperson, the mayor is also pushing for new tenant protections in Albany. However he has not taken any public positions on major proposals – Adams has repeatedly said he supports the concept of a “good cause” eviction bill but that small property owners should not be adversely affected by it.

Adams is also pushing the state to provide rental assistance for NYCHA residents, as the public housing authority faces a major pandemic-era rent-arrears crisis that is threatening its bottom line. Both houses of the Legislature have supported that push with additional funding allocated in their one-house budgets.

[LISTEN: Max Politics Podcast: Commissioner RuthAnne Visnauskas on Governor Hochul's 'New York Housing Compact' & State Budget Negotiations]

Criminal Justice
While Adams was one of the most prominent advocates last year for creating a “dangerousness” standard that judges could use while deciding to either set bail or remand a defendant into custody pre-trial, he has been less vocal on the issue this year. He has, however, gotten behind the governor’s proposal that would eliminate the “least restrictive standard” that judges use for setting bail in cases of violent misdemeanors and repeated offenders. Adams has made serial recidivists the focus of his push, saying they are responsible for a massively disproportionate number of crimes in the city.

Bail changes insisted upon by Hochul last year, leading to a late budget, were supposed to address the issue of bail eligibility for more serious misdemeanors and repeat offenders on alleged crimes like retail theft, but she has now argued that too many judges have either inappropriately used their discretion to allow pre-trial release without requiring bail or believed that the least restrictive standard required them to allow such release. Both Hochul and Adams appear to want judges to have and use bail more as a proxy for pre-trial remand, an apparent workaround for the dangerousness standard.

In Albany this week, Adams shifted the focus from bail alone to broader criminal justice reform. “I am not going to allow people to focus on one terminology that's not going to be a magic bullet,” he said of bail reforms, in similar comments to what Hochul has said as she also seeks tighter bail laws and other measures. “I think that lawmakers up here are going to deliberate over exactly what's going to happen on ‘least restrictive.’ It is up to them to come to a final solution to that.”

Adams has emphasized that the state needs to also increase funding for prosecutors and public defenders and make additional changes to the criminal discovery law to reduce the massive criminal court backlog caused by the pandemic. He is also in favor of Hochul's proposed additional investments in reentry services for those leaving the justice system.

Hochul’s budget did propose more funding for prosecutors, particularly to help with criminal discovery compliance. But public defenders didn’t receive a comparable funding boost in her plan. While her budget would increase wages for certain types of court-appointed defense attorneys, it did not fully provide funding to implement those increases, which will cost the city an additional $18 million each year if passed as-is.

Capital Construction and Procurement Reforms
Adams’ administration is undertaking a significant effort at reforming the city’s broken capital construction process, which includes a slew of state legislation to approve alternate project delivery methods, allow the use of progressive design build, establish the Department of Design and Construction as a public authority, change procurement to increase contracting with Minority- and Women-owned Business Enterprises (M/WBEs), among other proposals.

[Read: Promising Projects Faster and Cheaper, Adams Administration Pursues Capital Construction Reforms]

Community Hiring Legislation
Adams is also pushing for the state to approve community hiring legislation that would give the city the authority to mandate that companies receiving city contracts hire local community members. “Promoting community hiring will allow us to help 36,000 economically disadvantaged workers connect to good jobs every year,” he said in his State of the City speech in January.

Income Disregard
Adams has pushed for an “income disregard” bill that would allow low-income New Yorkers who complete a state or federally recognized job training program to continue receiving state public benefits such as Medicaid, child care, or rental assistance for six months even after obtaining a job. The proposal would mitigate the “benefits cliff” that individuals face when their income increases and puts them beyond the threshold for public assistance.

Expanding Tax Credits
Last year at Adams’ urging, the state approved an expansion of the city’s Earned Income Tax Credit for the first time in 20 years. Adams pledged $250 million annually to implement the expanded EITC while the state pitched in another $100 million of its own.

Last week, Adams rallied with labor leaders and lawmakers to call for enhancing the EITC and the Child Tax credit even further. Currently, only New Yorkers with Social Security numbers can avail themselves of the two benefits. Adams is pushing the state to broaden that eligibility to anyone with an Individual Taxpayer Identification Number, which would expand the credits to hundreds of thousands of immigrant New Yorkers, including undocumented immigrants.

Extending Health Care to Undocumented Immigrants
Governor Hochul’s budget included a proposed expansion of the state’s Essential Plan to provide health coverage to those with incomes up to 250% of the Federal Poverty Level, up from the current threshold of 200%. But immigrant advocates and lawmakers have called on the governor to go beyond that and expand eligibility to undocumented immigrants under the “Coverage for All” proposal. The proposal has even been backed by insurance providers.

Mayor Adams lent his voice to that advocacy this week, in a letter to the governor, according to a Spectrum News report. “We rarely have the opportunity to improve the lives of so many New Yorkers through a single policy modification,” he wrote.

Accessibility for undocumented immigrants would also reduce related costs on the state's Medicaid program, he argued. “Expanding EP eligibility to undocumented adults is an imperative of both moral and economic consequence," Adams said in the letter.

Medicaid Funding
Enhanced Federal Medical Assistance Percentage (eFMAP) funding supplements localities’ spending on Medicaid, in which huge numbers of New Yorkers are enrolled. But Hochul proposed that the state would retain 100% of that funding, inviting consternation from Democrats and Republicans alike. Mayor Adams was among the critics of that proposal, which he said would cost the city about $343 million annually.

Sales Tax and Distressed Hospitals
The governor yet again proposed extending a measure that would intercept about $150 million in sales taxes from New York City and divert it to the state’s Distressed Hospitals Fund. The fund, however, has not helped support struggling New York City Health+Hospitals facilities, and Adams has pushed for the governor to stop dipping into the city’s tax revenue for it.

by Samar Khurshid, senior reporter, Gotham Gazette

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