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Ten Key Takeaways from Governor Cuomo's Executive Budget


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Governor Cuomo outlining part of his 2015 agenda (@NYGovCoumo)


Last week, Citizens Budget Commission listed the Top Ten Things to Look for in the NYS 2016 Budget. Here is how they fared in the Executive Budget Proposal outlined by Governor Cuomo on January 21:

1. Windfall Settlement: Will these funds ultimately be spent prudently, with returns on investment?

The FY2016 Executive Budget uses $5.7 billion in bank settlement proceeds for one-time expenditures and investments. Although one-time uses are appropriate, the merits of specific proposals vary. The value of using $1.5 billion for an Upstate Revitalization fund to award $500 million apiece to three upstate Regional Economic Development Councils (REDCs) is speculative at best. But the proposed allocation of $1.7 billion to the Thruway Authority and the MTA is likely to pay off, especially if viable capital plans are developed for each. $850 million set aside to settle federal Medicaid liabilities is sensible.

2. School Aid: Will education reforms include a plan to fix broken school aid formulas?

A series of dramatic school reforms – including modifications to teacher evaluations, teacher tenure, and others are proposed along with a super-size school aid increase of 4.8 percent, or $1.1 billion, contingent on their adoption. Missing from the proposal is any discussion of school finance reform, an unfortunate omission. It is time to overhaul antiquated and byzantine school aid formulas to ensure funding flows according to need and district ability to pay.

3. Medicaid: Will spending stay under the cap of 3.6%? Will the cost of newly eligible immigrants be affordable?

The FY2016 Executive Budget grows Medicaid by 3.6 percent to comply with the "global cap," set at the 10-year average of the health inflation index. Both the global cap and Commissioner of Health's special authority to unilaterally reduce spending would be made permanent. To afford the cost of covering newly-eligible immigrants the Executive Budget establishes a Basic Health Plan which entitles the State to additional federal aid to offset costs.

4. Budget Growth: To meet 2% growth assumption, what spending will be reduced to make a surplus a reality?

Last year the State's financial plan began to show placeholder savings from limiting spending growth to 2 percent in future years. The presentation masked a true baseline gap of $1.8 billion in FY2016. To close the gap to meet the 2 percent growth target, state agency spending is held flat for savings of $92 million, and $1.4 billion is subtracted from planned spending in local government assistance. These reductions net against $176 million in new initiatives. Additional resources come from the upward revision of receipts and use of prior year surplus ($373 million), and capital and debt management initiatives ($121 million).

5. Tax Credits: Will expansion in programs continue without clear benefits documented?

The expansion of tax credit and other economic development programs continues. In addition to investing $1.5 billion through upstate REDCs, the FY2016 Executive Budget proposes a fifth round of $150 million in capital grants, a $50 million expansion of the State's venture capital fund, and $110 million to SUNY and CUNY for 2020 challenge grants. Excelsior tax credits also cover entertainment companies retroactively, entitling The Late Show to $11 million.

6. Design-Build: Proven tool in reducing construction costs has expired. Will the Governor continue to champion the cause, propose extension or PPPs?

With design-build, one contract is issued for the design and building of a capital project, allowing for better-designed, lower-cost projects. New York's three-year authorization saved 27 percent on Department of Transportation projects but expired as 2014 ended. The FY2016 Executive Budget makes design-build permanent and expands it to all State agencies.

7. Personal Income Tax: Lower tax rates for middle income brackets expire in 2017. Will the Governor propose an extension and how will he pay for it?

The FY2016 Executive Budget does not extend lower personal income brackets for middle-income earners or higher brackets for high-income earners. The plan assumes these tax policies expire on December 31, 2017. If the current middle-income brackets are extended without extending the higher-income brackets, future year budget gaps will grow.

8. State Agencies: Will this be the 5th year of frozen agency spending? Are there specific plans to realize greater efficiencies or just "do more with less"?

Agency budgets are held flat. Spending discipline has reduced the Executive-controlled workforce from 131,741 in FY2010 to a projected 119,160 in FY2016, a reduction of 12,581 positions, or 9.5 percent. The Governor committed to unveiling the NY Performs platform, recommended by the 2012 Spending and Government Efficiency or SAGE Commission. NY Performs has the potential to improve agency productivity if unit costs are paired with effectiveness measures.

9. Brownfields Tax Credits: Laudable veto of attempted extension by the Governor. Will sensible reforms follow?

In December the Governor vetoed the two-year extension of the Brownfield Tax Credit program. The FY2016 Executive Budget modifies the $500 million per year program by limiting eligibility to economically disadvantaged sites. Credits are limited to remediation costs, prohibiting developers from claiming them for building development costs.

10. Transportation: Clues to how the gigantic holes in the MTA and Thruway Authority capital plans will be filled? Tappan Zee financing plan?

The FY2016 Executive Budget proposes $1.3 billion from bank settlements for the Thruway Authority for the new Tappan Zee Bridge and other needs. The MTA would get $400 million for Penn Station Access and parking and development at suburban stations. Apart from the settlement funds, the State's five-year capital plan adds $750 million in capital appropriations for the MTA for FY2018 to FY2020. Although these investments are prudent, they constitute a proverbial "drop in the bucket" when compared to need. Viable financing plans are imperative for both entities.

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Elizabeth Lynam is Vice President & Director of State Studies for the Citizens Budget Commission, a nonprofit, nonpartisan watchdog organization dedicated to improving the fiscal condition and services of New York State and City governments.

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Have an op-ed idea or submission for Gotham Gazette? E-mail editor Ben Max: This email address is being protected from spambots. You need JavaScript enabled to view it.

New York Must Strengthen Sex Trafficking Laws


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Manhattan DA Cy Vance (photo: DA's office)


Sex trafficking is a lucrative criminal enterprise in which youthful looks are in high demand and actual children command top dollar. Yet, gaps in New York State's sex trafficking laws limit prosecutors' ability to convict traffickers of high-level felonies, making sex trafficking of children in New York a relatively low-risk proposition.

Forty-six states in this country recognize that prostituted children are victims of sex trafficking. These states acknowledge that vulnerable children innately deserve the strongest protection, and their laws enable prosecutors to seek tougher convictions and prison sentences for those who traffic minors. Currently, New York is not one of those states.

Traffickers are not merely common criminals, but often calculating heads of criminal enterprises that rake in thousands of dollars over the course of months – or even years – before their rings are dismantled. They know that Sex Trafficking is often difficult to prove, given the unwillingness of victims to testify against their abusers due to the trauma they have suffered, fear of retribution, and the complex psychological bonds many have developed.

In New York State, Sex Trafficking convictions require proof of force, fraud, or coercion, even if the victim is under 18. According to data compiled by the Polaris Project, New York is one of only four states where that is the case. That means, for instance, if New Jersey prosecutors prove that a defendant sold a sixteen-year-old girl for sex, that defendant would be convicted of Sex Trafficking – but in New York, prosecutors would additionally have to prove that the defendant used fear, fraud, or coercion to compel that teenager into trafficking. New York's laws are similarly weaker than the federal and international definitions of sex trafficking. That must change.

As national Human Trafficking Prevention Month draws to a close, I am calling on New York State legislators to give our prosecutors the same tools, allowing us to better protect the children traffickers target for sexual exploitation and profit. The penal code must be changed to recognize the fact that children do not have the legal, psychological, or emotional capacity to consent to sexual activity, as reflected in our statutory rape laws. This view of children should not change simply because there is an exchange of money.

Of course, New York takes trafficking very seriously. Recently announced state legislative initiatives include many significant proposals, such as changing Sex Trafficking from a nonviolent to a violent felony, and offering more support and services for victims. But there is a gaping hole in our State's laws governing the trafficking of children – one that would be simple to correct. We need to amend our penal code so that Sex Trafficking can be proved without evidence of force, fraud, or coercion when the victim is less than 18 years of age.

Law enforcement in jurisdictions that have this proposed statute, such as New Jersey and our counterparts in the Southern District of New York, are better able to secure high-level felony convictions and correspondingly lengthy sentences of traffickers. In contrast, New York State prosecutors have occasionally found that the only way we can bring a trafficker to justice is to seek prosecution in another jurisdiction.

Let me give you an example. Royce Corley, who also went by the name "Ron Iron," ran a prostitution ring in Manhattan in 2011 and 2012 that included underage girls. He photographed the children – including three 16-year-olds – in explicit poses, advertised them on backpage.com, and made thousands of dollars by selling them for sexual services. Working with our partners in the NYPD, Corley was arrested after an undercover sting.

Despite the fact that Corley was prostituting children, my office's Human Trafficking prosecutors were unable to charge the defendant with Sex Trafficking under current New York State law. So, we asked the Southern District of New York to take the case, and to seek appropriate justice where we could not. Following his trial conviction under Federal sex trafficking statutes, Corley was sentenced to 10 years in prison and 10 years of post-release supervision.

Prosecutors should not have to hand-off cases to ensure that victims in New York get justice. My proposal would not only ensure that offenders could be convicted of higher felonies and therefore receive stronger sentences, but would also ease the traumatic experience a victim may face if a case goes to trial.

Eliciting testimony about sexual conduct and force, fraud, or coercion is incredibly difficult for any victim, let alone a child. With the proposed changes, a child's testimony could essentially be boiled down to two questions: How old are you? And, were you prostituted by the defendant on trial?

At its core, this proposal is an acknowledgement that a child sold for sex is a victim, plain and simple. Let's follow in the footsteps of the overwhelming majority of other states, the federal government, and the international community. Let's ensure that those who profit from selling children will face consequences commensurate with their crimes. Let's do what is just for the most vulnerable among us.

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Cyrus R. Vance, Jr. is the Manhattan District Attorney.

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Have an op-ed idea or submission for Gotham Gazette? E-mail editor Ben Max: This email address is being protected from spambots. You need JavaScript enabled to view it.

Shelly Silver’s Arrest: 5 Immediate Impacts on Albany


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Silver, right, and Cuomo face shifting power dynamics (photo: @NYSA_Majority)


A former member of the New York State Assembly once told me off the record that the real reason Sheldon Silver didn't disclose who his law clients were was not because he was afraid of being exposed for doing their bidding in the Legislature, as Silver's critics have long alleged; Silver's real secret was that he didn't actually have any law clients whatsoever and that he was being paid millions of dollars by the firm Weitz & Luxenberg for doing no work at all. Thursday's five-count indictment of Silver by the U.S. Attorney's Office appeared to affirm that portrait of the Speaker's outside income from Weitz & Luxenberg and another firm, Goldberg & Iryami.

While Silver, an extraordinarily resilient politician, could certainly survive the charges brought again him and hang on as Assembly Speaker, his arrest will undoubtedly weaken him immensely for the rest of his career in office and have major implications for the current political and legislative landscape in Albany. The following are five immediate ramifications of Thursday's bombshell turn of events:

1) POWER SHIFT: For over a generation, Silver has been one of Albany's "three men in a room" and during the troubled administrations of Govs. Spitzer and Paterson emerged as the most powerful of the three, often appearing to be the lone responsible party keeping the ship of state from crashing into the rocks. That power dynamic shifted when Gov. Cuomo, a forceful chief executive, took office in 2010, and Silver was wounded by the series of scandals that have rocked the Assembly in recent years—most notably, the Vito Lopez sexual harassment cover-up complaints—as well as the arrest and conviction of one of Silver's closest friends and associates, Willie Rapfogel.

Still, Silver has consistently been, at least on paper, progressive Democrats' foremost champion in the Capitol. If he does remain Speaker, Silver will have a very difficult time holding the line on progressive priorities, particularly if the consistently rock-solid support of his members starts to break down. If Silver gives up his post or is forced from it, Gov. Cuomo is almost certain to try to heavily influence the succession process to ensure that the next Speaker is a pliant ally. If Cuomo prevails, he will further tip the balance of power in Albany in his favor. If the Legislature holds out for an independent Speaker, there will be enmity in the proverbial "room" which will shake up the relatively amicable working relationship Cuomo, Silver, and Senate Republican Leader Dean Skelos (and IDC head Jeff Klein) have enjoyed for the past four years.

2) POSSIBILITY OF REFORM: Silver's arrest is already prompting yet another call to address Albany's appalling epidemic of political corruption. Since the allegations against Silver stem from his outside income, the Legislature's rules governing what money senators and Assembly members can make from their other jobs and how they have to disclose it—rules good government groups have long slammed as far too lax—are certain to come up for review. A debate over whether the Legislature should become full-time to eliminate the possibility of members being entangled in any perceived or actual conflicts of interest is also likely to arise, though the Legislature would probably only sign off on this change in conjunction with a significant pay raise for legislators, which it is hard to believe could pass amid the current political atmosphere without a serious voter backlash in 2016.

Leadership term limits may also now be on the table in light of how long Silver was allegedly enriching himself via his position. Since Gov. Cuomo shuttered the Moreland Commission on Public Corruption in March as part of a deal with Skelos and Silver, he will be under significant pressure to demonstrate that he didn't let Silver almost skirt free, and to prove that he is as determined to clean up Albany as he has repeatedly professed. Silencing his critics who claim that he has been soft on—if not complicit in fostering—Albany's culture of corruption will now become one of the governor's chief concerns for the foreseeable future—and will encumber his ability to focus solely on achieving the ambitious agenda he laid out yesterday—with Silver on stage beside him—in his State of the State address.

3) HOUSING FIGHT UNCERTAINTY: Tenant advocates hoping to preserve and strengthen New York City's rent control laws and other key pieces of housing legislation that are sunsetting this year have placed a lot of their eggs in Shelly Silver's basket. Though Silver was Speaker two of the times the city's housing laws were weakened in Albany, tenant advocates widely regard him as their foremost bulwark in the Capitol, as they are suspicious of where Gov. Cuomo, who received millions of campaign dollars from the real estate industry, sides in the fight, despite his having helped them win stricter limits on the deregulation of apartments in 2011 and creating the Tenant Protection Unit, which landlords generally do not like.

If Silver remains Speaker, it will be far more difficult for him to defend the city's rent laws, and if he is ousted, it will matter significantly who takes his place. If his successor is Assembly Housing Committee Chair Keith Wright, who is always quick to point out that he lives in a rent control apartment, a change could end up potentially benefitting tenant advocates, but Wright is also a close ally of Cuomo, who appointed him co-chair of the New York State Democratic Party in 2012, and unlikely to cross the governor. In any event, an already tense situation for tenant advocates got much more stressful for them on Thursday.

4) TORT REFORM BACK ON THE TABLE: Supporters of modifying or eliminating New York State's Scaffold Law undoubtedly are rejoicing today. The law, which holds contractors and property owners 100 percent liable if a worker falls on the job, is detested by business groups and the real estate industry, which insist it dramatically drives up the cost of building, and fiercely defended by union advocates and trial attorneys, the latter of whom receive a lucrative percentage of the often large settlements that can result from lawsuits that hinge upon the statute. Since he became Speaker in 1994, there has been no more dependable and aggressive ally than Silver of the New York State Trial Lawyers Association, on whose board Weitz & Luxenberg partner Arthur Luxenberg sits.

Last year Gov. Cuomo called the trial lawyers "the single most powerful political force in Albany" in explaining to Crain's why there was no current path to reforming the Scaffold Law, and that power largely emanates from Silver. With Silver hobbled and his financial ties to law firms centrally related to his indictment, it will be much harder for the Trial Lawyers and related lobbies to rebuff any efforts at reforming the Scaffold Law and other favorite targets of tort reform advocates, like contingency fee limits and trespasser responsibility.

5) MORE SCALPS?: The reason Shelly Silver is only a year short of becoming the longest serving Speaker in Assembly history is because he has been very good at his job. The speaker's principal responsibility is to protect his members, and in that regard Silver has been exemplary, often taking the heat for bad and criminal behavior by his members when he could have easily opted instead to hang them out to dry. With Silver on the ropes, he won't be in a position to protect his members any more, and human nature being what it is, now that they are exposed to the elements some of his members may turn on each other or on him, creating a general atmosphere of paranoia, hostility and shameless opportunism.

U.S. Attorney Preet Bharara has every reason in the world to put in jail every corrupt elected official in the state, particularly after he so publicly took over the Moreland Commission's investigations, and so far he has demonstrated a dogged willingness to do so. In the past there has been an omertà in Albany, kept sacred by the leaders of the Legislature. It's hard to believe that Skelos and Silver will be able to enforce that code of silence moving forward with the same vigilance.

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Morgan Pehme is the former editor-in-chief of City & State, and a frequent commentator on New York politics and government on television and radio.

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Have an op-ed idea or submission for Gotham Gazette? E-mail editor Ben Max: This email address is being protected from spambots. You need JavaScript enabled to view it.



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