Gov. Cuomo arrives to outline the budget agreement (photo via The Governor's Office)
Gov. Andrew Cuomo proposed a sweeping $20 billion plan to build and preserve affordable housing and fight homelessness during his State of the State speech earlier this year. The plan, to be implemented over five years, is expected to create 100,000 new units of affordable housing and 6,000 supportive housing beds for the homeless. The policy book accompanying Cuomo's speech and executive budget outlines several general housing categories and promised more detail "in the coming weeks."
Last week, Cuomo and legislators agreed on a new $147 billion state budget for fiscal year 2017 that includes nearly $2 billion for affordable housing, but it offers no details on where the housing will be built, who will build it, or when the state will start looking for projects to fund.
In the place of specifics is a notice that the plan is to be worked out in a memorandum of understanding (MOU) between Cuomo and legislative leaders. In other words, Assembly Speaker Carl Heastie, Senate Majority Leader John Flanagan, and Cuomo will be allowed to decide behind closed doors, through a negotiated legal document, how to spend the initial $2 billion intended for affordable housing projects. It is unlikely to face scrutiny from the public or rank-and-file legislators.
"The debate over supportive and affordable housing was pushed off because all the oxygen in the room was sucked up by the minimum wage debate," said Assembly Member Andrew Hevesi, a Queens Democrat who has sparred with the Cuomo administration in the past over the governor's funding of supportive housing, of budget negotiations.
Senator Liz Krueger, a Manhattan Democrat, said she believes that Cuomo and legislative leaders will have to spell out what they plan to do with the $2 billion of budget money lined out for housing programs in a resolution later this year and put it to a vote in both houses. "I believe each house will have to vote on a resolution lining out specifically how it's going to be spent," Krueger told Gotham Gazette. "I don't know what they believe, however," she said referring to legislative leaders and the Cuomo administration. "We are a little loosey-goosey with the law around here, it's just the Capitol."
Hevesi said he believes that the same budget negotiating teams that negotiated human services and housing issues from both legislative houses and the Cuomo administration will reconvene to hash out the details later this session. He does not expect a public vote. He said he expects the Assembly, which is dominated by New York City Democrats including Heastie, to work as an advocate for the city and its specific housing needs during negotiations.
During a Tuesday press conference at the Capitol, Assembly housing committee Chair Keith Wright said that housing is still "an open question in the budget" that will be worked out by "MOU."
"This has never been done before," said Krueger. "You are not supposed to have lump sum appropriations decided without the vote of the Legislature. We are talking about a hypothetical plan to spend $20 billion on housing, there should be a robust discussion on how it's being spent, where it's being spent, and the plusses and minuses of any particular approach."
David Friedfel of the Citizens Budget Commission said that while it isn't "uncommon" for MOUs to be used in the budget, it is new to see one used in a program related to housing. "It's not uncommon but it's not something we support," Friedfel told Gotham Gazette. "We've seen these MOUs used to create the pots of money that got Sheldon Silver and Dean Skelos into trouble."
In fact, MOUs are used throughout this year's budget, especially in language funding the governor's major infrastructure projects.
This year's budget also includes more of what good government groups have come to call "slush funds" created for use by the Governor and Legislature.
Cuomo administration officials did not respond to requests for comment about the housing MOU or about when to expect more details about the governor's affordable housing and homelessness plans.
In January, Cuomo outlined some overarching goals for his housing plan. His policy book released for his State of the State and budget address says the intention of his $10 billion housing plan is: "To add critical supply to the state's stock of affordable housing."
It says the plan "will create and preserve 100,000 units across the state. This historic investment offers a transformational blueprint to address the diversity of housing need across the state, strengthen protections for tenants, and create new opportunities for low-to moderate income households. The Plan —which boosts state spending on housing programs by nearly $5 billion—will build and preserve affordable units and individual homes; make homeownership affordable for first-time buyers; increase investments in the revitalization of our communities; promote housing choice opportunities for all New Yorkers; revamp services in ways that better serve clients including New Yorkers seeking affordable housing..."
The policy book is short on other specifics, but promised, "The comprehensive House NY 2020 Plan will be released in the coming weeks." Almost three months later and with the new budget passed, there still aren't many specifics.
The Capital Budget shows a $1,973,475,000 allocation for a "Housing Program" under the Division of Housing and Community Renewal. Nearly $600,000,000 of that goes to the creation of an "Infrastructure Investment Account." The language for the program states:
"In support of a comprehensive, statewide multi-year housing program in accordance with a plan approved in a memorandum of understanding executed by the director of budget, the speaker of the assembly and the temporary president of the senate."
Any of the cash appropriated to the account can be "suballocated to any state department, agency, or public authority for the purposes stated herein, only in accordance with a plan approved in a memorandum of understanding executed by the director of the budget, the speaker of the assembly, and the temporary president of the senate, who shall file such approval with the department of audit and control and copies thereof with the chair of the senate finance committee and the chair of the assembly ways and means committee."
The budget language further stipulates that the cash for the fund be doled out over a five-year period.
The budget also contains a $57.5 million line for the creation of supportive housing, which is long-term housing with social services, and $5 million for emergency and transitional housing for people with AIDS.
"It's concerning that we have a verbal commitment of $20 billion but here we have a $2 billion commitment meant to be spent over five years," said Sen. Krueger, who said it could be worrisome for those interested in building affordable housing. She noted that the nature of construction dictates that all the money wouldn't need to be spent up front, but having it lined out in budget documents would be helpful to those interested in utilizing state cash to subsidize affordable housing.
Mayor Bill de Blasio appears to be one of the many New Yorkers interested in having more details on the state's affordable housing agenda. De Blasio has an ongoing ten-year, 200,000 unit affordable housing plan, as well as several programs aimed at combatting homelessness. "We look forward to seeing further action on increased State support for homelessness and housing as the session continues, and ensuring those priorities receive the scrutiny they merit," de Blasio said in a statement reacting to the passage of the state budget.
The mayor had a similar reaction after Cuomo's State of the State address in January. "You know, it's an initial idea," de Blasio told reporters at the time of the $20 billion, five-year plan announced that day. "We have to see the specifics about timelines and how it's going to play out, but look, it can only be for the good of New York City if the state is making an additional commitment to New York City on affordable housing on top of the 200,000 units we're already committed to."
A representative of the city's Department of Housing Preservation and Development (HPD) had the same message this week. "We are looking forward to hearing more about the State's plans for additional resources for the construction and preservation of affordable housing in New York City," a spokesperson said in a statement emailed to Gotham Gazette.
Cuomo's plan follows de Blasio's, outlined in 2014, to create 80,000 units of affordable housing and preserve another 120,000 units (preservation of units includes extending rent regulations through benefit-agreements with landlords). De Blasio also pledged to create 15,000 supportive housing units over the next 15 years, announcing in December a new supportive plan after negotiations with the state on a new joint program did not yield results (there have been three such programs in the past, stretching back several mayors and governors). Going back to last year, the governor has been a regular critic of de Blasio's management of the city's homelessness crisis. When announcing his supportive housing plan, de Blasio challenged the state to act. It appeared Cuomo was doing so as he delivered his State of the State.
Now, advocates are concerned there may not be all that much new money in the budget. Cuomo administration sources have indicated the $20 billion figure includes "on and off budget resources" including tax credits and funding for housing-related departments such as the Department of Homes and Community Renewal.
Friedfel of CBC said that the use of MOUs makes it harder to follow how money is being spent, but that it also has advantages for those spending it. "It does make it more difficult to track than a more generic appropriation," said Friedfel. "It also gives them more freedom about how to spend it."
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by David King, Albany editor, Gotham Gazette
@DavidHowardKing @GothamGazette
Gov. Cuomo outlines the budget agreement (photo via The Governor's Office)
AGov. Andrew Cuomo welcomed reporters into the Capitol's Red Room for the first time in nearly a year to announce a budget deal at 8:30 p.m. Thursday night. The announcement came as both houses of the Legislature took a break from voting on budget bills that had already been introduced, yet neither legislative majority leader joined Cuomo for the press conference.
Legislators from the minorities of the two houses lamented having little time to review the bills and the fact that most of them were short any real policy decisions and featured sections marked "intentionally omitted."
After weeks of haggling, bursts of information, and rumors, Cuomo announced some hard numbers contained in the budget, just a few hours before the start of the new fiscal year. The governor happily announced that New York would see a phase-in of a $15 minimum wage and a paid family leave program. He appeared less thrilled when admitting his proposed Medicaid cost-shift to New York City was not part of the budget (this after his CUNY cost-shift had been taken off the table a few days ago).
"I am very excited about this budget," Cuomo said. "We call it a budget – really it is an overall operating plan for the state of New York and I believe that this is the best plan that the state has produced, if its passed, in decades, literally."
The state budget agreement by the numbers:
8:30 p.m: scheduled time of Gov. Andrew Cuomo's announcement of a budget deal; 3.5 hours before the start of the new fiscal year.
$147 billion: estimated size of the state budget.
0: legislative leaders present at Cuomo's budget announcement.
0: times Republican Senate Majority Leader John Flanagan mentioned a minimum wage increase or paid family leave in a seven-paragraph statement put out by is office to celebrate the budget agreement.
4: men who controlled budget negotiations (Cuomo, Flanagan, Heastie, and Klein).
3: budget bills introduced to both houses to be voted on before a deal was actually announced.
3 p.m: time the Assembly started debating the first budget bill, without a deal announced.
4 p.m: time the Senate began debating its first budget bill, without a deal announced.
6: budget bills left to vote on after a budget deal was announced.
12/31/2018: date New York City will see its minimum wage hit $15 per hour for businesses with more than ten employees.
12/31/2019: date New York City will see its minimum wage hit $15 per hour for businesses with ten or fewer employees.
12/31/2021: date Long Island and Westchester County will see the minimum wage hit $15 per hour.
$12.50: hourly minimum wage localities north of Westchester will reach on 12/31/2020, at which time the state budget director and department of labor will set a path to $15 per hour.
6: years Cuomo claims to have kept budget growth under 2 percent. (Some budget watchdogs claim Cuomo uses tricks and gimmicks to appear to meet the cap.)
2: years in a row the state budget has been voted through after the March 31 midnight deadline and thus technically "late."
6.5%: increase in school aid, which totals $24.8 billion.
$240: increase in per pupil aid for charter schools.
12 weeks: length of new New York paid family leave benefit, for paid time off to care for a new child or ailing relative.
2018: year paid family leave will begin in New York
50% of an employee's average weekly wage, capped to 50 percent of the statewide average weekly wage, is where paid family leave pay will start. When fully implemented in 2021 it will be 67 percent of an employee's average weekly wage, capped to 67 percent of the statewide average weekly wage.
6: months workers will have to have worked at a job before being eligible for New York's paid family leave.
$26.6 billion: amount the budget includes for capital facilities operated by the Metropolitan Transportation Authority (MTA).
$1.5 billion: marked for phase II of the Second Avenue Subway.
63: copies of a report detailing changes made to the executive budget that Senate Republicans had to have printed off for Senators after Sen. Liz Krueger pointed out the report was required by law.
Not in the Budget
$485 million previously proposed cost shift to New York City for CUNY funding.
$250 million Medicaid cost shift to New York City.
A plan to replace the 421-a property tax credit used by New York City to entice developers to include affordable housing in their developments.
$240 million initially sought by the Cuomo administration to give CUNY staff retroactive raises.
0 criminal justice proposals from the executive budget included in the final budget.
0 ethics reforms.
[Related: Everyone Agrees Albany Needs Ethics Reform, Except the People Who Matter Most]
[Related: For State Budget, Leaders Choose 'On Time' Over Open]
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by David King, Albany editor, Gotham Gazette
@DavidHowardKing @GothamGazette
Heastie, Cuomo, Flanagan (l-r) (photo via The Governor's Office)
"Top of my agenda is going to be ethics reform," said Governor Andrew Cuomo, speaking on NY1 on Jan. 3. "We have done a lot in Albany, but we haven't done enough. And I'm going to push the legislature very hard to adopt more aggressive ethics legislation, more disclosure, more enforcement, etcetera."
While the governor did unveil an aggressive ethics agenda during his State of the State speech a week later, Cuomo’s words ring hollow now, as a state budget containing no government ethics reform passes and any hope for such reform happening this year is pushed to the legislative session, where it is unlikely to occur.
Cuomo has done nothing public on ethics reform despite the promises he made during his Jan. 13 State of the State address. “We have to remember the people we serve, and it’s our responsibility to give them the government that they deserve,” Cuomo said at the time. “And remember the stronger the citizen trust, the stronger the government’s ability.”
Just about a month after two of New York’s most powerful legislators were convicted of several federal corruption charges in separate trials, Cuomo laid out a plan to close the LLC loophole, which allows limited liability companies to circumvent New York’s campaign donation limits and give large sums of money to candidates through various LLCs, limit the amount of outside income legislators may earn, and adopt a publicly funded campaign finance system, among other reforms.
Yet, as negotiations for the state budget come to a close, the “three men in a room” deciding the state’s roughly $150 billion budget have not moved ethics reforms that could help give the people they serve “the government that they deserve.” In a Siena College poll released Feb. 1, 89 percent of New Yorkers said corruption in state government is a serious problem, with 60 percent calling for outside income to be banned.
Although Assembly Speaker Carl Heastie, a Democrat and one of the “three men in a room” along with Gov. Cuomo and Republican Senate Majority Leader John Flanagan, has pledged to “increase transparency and accountability” and “restore the public’s trust in government,” the lack of any ethics reform in the state budget calls Heastie’s follow through on that commitment into question.
“The Assembly has pledged to enact comprehensive ethics reforms, and we take that commitment very seriously,” said Heastie in a press release detailing the ethics reform component of the Assembly’s budget plan, which was released Friday evening March 11. Like Cuomo, Heastie outlined an ethics reform agenda, but did little else to publicly promote it.
On that Friday morning three weeks ago, Heastie outlined the Assembly Democrats’ ethics package at an event held by Crain’s New York Business. The plan also includes a proposal to close the LLC loophole, as well as proposals to limit the amount of outside income legislators may earn (though not as strictly as Cuomo’s plan), and to make it so that legislators who also work as attorneys can only earn money for the casework they perform, rather than for simply serving as "of counsel," lending their name to a law firm - a practice at root of the scandal that brought down Heastie's predecessor, Sheldon Silver.
Both Silver and former Senate Majority Leader Dean Skelos were brought down last year by corruption convictions related to their use of their public offices for private gain.
The new head of the Republican-controlled Senate, meanwhile, has repeatedly questioned the need for further ethics reform, and he and many other Senate Republicans are opposed to making the Legislature full-time or placing any limits on lawmakers’ outside income.
Sen. Flanagan has previously pointed out that the Senate passed a pension forfeiture bill, aimed at ensuring that legislators convicted of public corruption cannot collect a government pension, in a deal with the Assembly, only to have the Assembly back out at the last minute. Pension forfeiture is notably absent from the Assembly's reform plan.
As the New York Times Editorial Board writes, “In Albany, this is how the stage gets set for each legislative house to praise itself and to blame the other for the failure, yet again, of meaningful reform, and for Mr. Cuomo to blame them both.
New Yorkers, legislators, and government reform groups alike say that ethics reform is essential, “especially considering the context of the past year,” as Cuomo himself said during his State of the State. Yet at a time when Cuomo has the most leverage, he has failed to achieve reform. Heastie has decided not to aggressively pursue the Assembly's plan, and Flanagan has appeared totally disinterested in the issue. The minorities in each house - one Democratic, one Republican - have actually been more vocal than the majorities.
“We are blowing our Watergate moment,” Senate Minority Leader Andrea Stewart-Cousins told the Wall Street Journal. “This year’s budget process has been nothing but a series of covert meetings and phone calls shielded from the press and public.”
Senate Republicans’ resistance to outside income limits and closing the LLC loophole have left room for Cuomo and Heastie to play a blame game. In part because neither did anything beyond one speech to promote ethics reform leading up to the budget, there is room to question their seriousness. But, Senate Republicans have, it seems, let the two Democrats and Assembly Democrats in general off the hook.
“It is incumbent upon legislators to work to significantly reduce corruption, and we can do so by passing these common sense measures,” Assemblymember David Buchwald said upon signing a pledge to fight for good government reform, including closing the LLC loophole. “I think the vast majority of New Yorkers would want to see their representatives sign this pledge.
"In recent times, the New York Legislature has been marked by regular bribery, rampant kickbacks and a rancid culture," U.S. Attorney Preet Bharara, who prosecuted both Silver and Skelos, said during a talk in Albany in February.
A coalition of government reform groups, including Citizens Union, Common Cause, the League of Women Voters, the New York Public Interest Research Group, and Reinvent Albany, released a statement denouncing the governor and legislative leaders for failing to pass any ethics reform in the three-and-a-half months since former legislative leaders Skelos and Silver were convicted of corruption, despite strong public demand for action to be taken.
“With a recent poll showing that nearly 90% of New Yorkers believe that unethical behavior is a serious problem in state government a month before former legislative leaders Sheldon Silver and Dean Skelos are sentenced for public corruption,” the statement reads, “the governor and legislative leaders have an obligation to New Yorkers to reach a significant agreement on ethics reform.”
“The collapse of ethics reform during the budget is failure by the governor to mobilize overwhelming public support for change," said Blair Horner, executive director of NYPIRG. “New York State’s political leaders have chosen to ‘kick the can’ instead of tackling the needed reforms to respond to Albany’s ‘Watergate moment.’”
When Cuomo was asked in February whether ethics reform were likely to remain in the budget, the governor replied, “As we get closer and actually have budget conversations, it’s going to be at the top of the list.” Not long after, Cuomo conceded that ethics reform would not be included in the budget.
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by Meg O'Connor, Gotham Gazette
@megoconnor13 @GothamGazette
Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.