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The High Stakes of Hochul's Housing Compact


Gov. Hochul talks housing (photo: Kevin P. Coughlin/Governor's Office)


Governor Kathy Hochul is attempting a major course correction in New York’s approach to housing creation in this year’s state budget and the stakes couldn’t be higher. For the governor, weakened after a tighter-than-expected election that won her a first full-term, it could be a major legacy-making achievement even if its effects aren’t felt immediately. And for New Yorkers, it could be the first meaningful step towards truly easing the state’s acute housing shortage and reducing the atmospheric cost of housing in the state.

Though it faces some opposition in the Legislature, Hochul’s focus on housing supply also meets legislators’ prioritization of tenant protections, laying the ground for a potentially seismic compromise that incorporates significant elements of both.

“A lot is at stake," said Rachel Fee, executive director of the New York Housing Conference (NYHC), a nonprofit advocacy group. "This is a framework for housing supply, which is the core issue impacting housing affordability in New York,” referring to Hochul ambitious plan. 

In the decade before the pandemic, New York State created more than 1.2 million jobs but only about 403,000 units of housing. Housing production in the state lags far behind many other jurisdictions. New York City, for instance, created only 27 new homes for every 1,000 residents between 2011-2020, a slower rate than many major cities including Los Angeles, San Francisco, Washington D.C., Miami, Seattle, and Austin. New York’s suburbs are even worse, with the lowest rates of new housing permitted between 2010 and 2018 compared to suburbs in Massachusetts, Connecticut, Southern California, New Jersey, Pennsylvania, and Northern Virginia.

Hochul has proposed a “Housing Compact” designed to fulfill the state’s need for 800,000 homes across the state in the next ten years. It involves three major elements – requirements for regional and local housing growth (3% in each locality downstate and 1% upstate over three years) along with enforcement mechanisms; and major rezonings around MTA transportation hubs to encourage more housing density near mass transit.

Third, the plan also includes easing environmental review regulations that have often slowed housing development, a property tax exemption for localities that allow accessory dwelling units, and several proposals specific to New York City including eliminating the floor-area ratio (FAR) cap in the city to allow more dense buildings, allowing conversions of underused office space to housing (along with a proposed tax credit to encourage set asides for affordable units in those developments), and allowing the city to provide amnesty to existing basement apartments as well as a pathway toward safe, legalized units.

To support localities in their housing efforts, Hochul also allocated in her budget proposal $250 million for an infrastructure fund and $20 million for planning and technical assistance.

“I'm leaning hard into this idea of building more housing simply because other states are far ahead of us,” Hochul said in the city of Cohoes last month. “We're losing people to our neighboring states because they have more supply, therefore the prices are cheaper. Again, it's real simple economics here. So that's what I'm focusing on. I'm supporting communities that have their own vision. I'm encouraging others who don't have the same vision to understand that this is a matter of survival. Building more housing and creating housing - all levels of housing.”

“I want people 150 years from now to look back and say, ‘What we did in 2023, investing in these communities, building the housing people need, was a catalyst for a future, which was absolutely unstoppable,’" she added.

Though some believe they could be doing more, the governor and her team have made significant efforts to raise support for the Housing Compact since she first announced it in her State of the State speech in January. The governor held roundtables on the housing crisis in every region of the state, and she has touted the Compact, and local support for it, in Syracuse, Albany, Rochester, Rye Brook, Patchogue, and White Plains, the governor’s office said.

RuthAnne Visnauskas, the Hochul-appointed state housing commissioner who helped craft the Compact, has also held 75 meetings on the issue with state lawmakers, mayors, town supervisors, county executives and community groups, according to the governor's office. More than 100 organizations and nonprofit groups have announced support of the Compact.

A Slingshot Strategies poll, commissioned by the pro-development group Open New York and released March 1, found that 64% of registered voters support the governor’s overall housing agenda, which also had 66% in support in Westchester and Putnam Counties — two of the key suburban battleground areas where the push for more housing can be particularly fraught.

A Siena College poll released March 27 found that 90% of New Yorkers said that affordable housing is a serious problem in the state, coming in close behind the 92% who said the same about crime. Nearly half, 45% of voters, supported the housing target mandates proposed by Hochul while 37% opposed them. Support and opposition were also split along party lines – 67% of Democrats support the idea while 63% of Republicans oppose it.

The Democratic majorities in the State Senate and Assembly, however, did not embrace it – in their one-house budgets, both chambers instead proposed voluntary growth targets with $500 million in incentives for localities through infrastructure funding. Both Democrats and Republicans have pushed back against the proposal’s enforcement mechanism, which would override local control over housing and zoning.

While promoting the Compact on Long Island last month, Hochul said that building more homes is essential to ensure that the state’s economy can keep growing and that people can find an affordable place to live throughout the state. “We've created so many more jobs than ever before, but we've not kept pace with building the housing,” she said. “And communities large and small all have a capacity to just grow a little bit more. Some want to grow big; some want to keep their small character. I understand that and they should. But we have to open up the doors so we can get people to be able to live here."

“I think [the Housing Compact] was one of the most bold and courageous proposals that she had this session,” said Neal Kwatra, founder of Metropolitan Public Strategies, a consulting firm. Kwatra said that the governor’s plan was naturally bound to receive some opposition as she attempts to deal with an intractable issue, but he has “honestly been really troubled” by the response to the governor’s plan from her own party.

He also noted that while a majority of Republican voters have rejected the governor’s plan, Democratic voters are on board. “If Democrats stuck together, this is a no-brainer because there is widespread statewide Democratic Party primary voter support. There is independent voter support for this concept,” he said.

“I don't want to be hyperbolic about it but this to me is not dissimilar to fights we've had throughout this country's history, on issues like bussing, on school desegregation,” Kwatra added, echoing those who see Hochul’s plan in part as an opportunity to advance fair housing goals. “Anytime we decide to bring more people to the party, namely all of society, all of our citizens, we have this kind of tension.”

Housing experts and advocates say that the Housing Compact could be a historic reset to housing policy in the state with the appropriate eye on the future, but that it can only work if there are growth mandates in place. Exclusionary places unfavorable to change, they point out, are not going to be easily swayed by the offerings of infrastructure funding to accompany new housing that current homeowners do not welcome.

As Visnauskas and others have said, New York took lessons from other jurisdictions where an incentives-only approach has repeatedly failed to produce the necessary level of new housing. There’s also broad agreement that the governor’s best opportunity to get approval for the compact is in the budget, since it contains fiscal incentives tied to housing targets and because she will lose the major budget process leverage she has in the post-budget legislative session.

Carrots and Sticks
The proposal to set mandatory targets for housing creation is seen as the most essential to progress but has proven to be the most controversial aspect of the Housing Compact. Under Hochul’s plan, if localities either fail or refuse to meet growth targets or take any zoning actions to encourage new housing to be built, real estate developers would be able to use a fast-track method to get approvals for projects by appealing to the courts or a new state-level Housing Review Board.

“We feel very strongly about the mandate, and that without that this is not really a policy that is going to have a lot of impact,” said Visnauskas, in a recent appearance on Gotham Gazette’s Max Politics podcast. “And frankly, that we don't have a lot of time to do what other states did, which is work this out over the course of the next decade and maybe get to a mandate then, because the housing crisis is too real and too severe for too many people.”

As Visnauskas and Hochul have explained it, the Compact gives localities a great deal of say in how they grow, but they must grow their housing supply, before any enforcement or overrides kick in.

Republicans and some Democrats, particularly those representing the suburbs, have broadly criticized the mandate, insisting on maintaining “local control, not Hochul control.”

“Certainly, her proposal of having a statewide board that would overrule local government is inappropriate and probably unconstitutional,” said State Senator Patricia Canzoneri-Fitzpatrick, a Nassau County Republican, in a phone interview. “Her proposal would, in essence, nullify the votes of all of my constituents to elect intermediate levels of government and overrule them and say, ‘We don't really care what your local zoning says.’…That kind of dictator edict is not well received by anybody.”

Speaking to reporters on Monday, Assembly Speaker Carl Heastie, a Bronx Democrat, said any local zoning overrides were a tough sell for the Legislature. “As a state legislator, deference to local control is something that…you try to be respectful of,” he said. But he did concede that localities, particularly in the suburbs, need to build more housing and eliminate outdated regulations that have restricted new development. “I do think that you can try to deal with all of those things but you just have to try to figure out what's the best way to accomplish this,” he said.

Senate Majority Leader Andrea Stewart-Cousins, a Westchester Democrat, similarly said that every aspect of the Housing Compact was up for negotiation, even the growth mandate. “I'm not opposed to the ‘stick,’ as they say, but I don't like to start with sticks. I want to start with ‘carrots’ and community engagement so that we can get to the end that we'd like,” she said.

She insisted that Senate Democrats are looking at housing “holistically” and that there are issues that also need to be addressed, including the Housing Access Voucher Program, “good cause eviction” protections, and tenant rent-arrears funding. “I've always said our conference looks at it holistically. We know that we need to build more housing in New York. And we also know that we need to keep tenants in their housing,” she said.

Supporters of the Compact say the governor should not budge on the mandate, even if other aspects of the compact are dropped which could be addressed in the future.

“The governor really needs to hold the line and stay very strong on the proposal for the housing compact,” said Annemarie Gray, executive director of Open New York and a former New York City housing and planning official, in a phone interview. “[W]e need a statewide framework that has to be real, required, enforceable, permanent; that actually really makes sure every part of the state adds housing opportunities. And that has to be at the center of the proposal.”

Gray and others like Fee do say that the Compact could be improved and negotiated in different ways, and perhaps there could be more flexibility in the density requirements and local control.

“I think we do have to push localities to do their part, but I think we also have to be listening to what are some real concerns on how to fix this,” said Fee, who recently wrote an op-ed recommending areas of potential compromise. And the governor’s team is listening to feedback. Visnauskas said on the podcast that the proposal could be changed, for instance, to give some relief to localities that have already been steadily building housing or passing zoning reforms towards that goal.

But Fee insisted that the mandates should remain, instead of the incentive-only proposal floated by the Legislature. “What's on the table right now is an incentives-only approach which we feel will be totally ineffective,” she said. “And I think the Governor has been clear that she's not going to go for that and part of the reasoning is, we don't have time to waste. We've seen that this has failed in other states.”

‘It Has to Get Done in the Budget’
Asked about whether a housing deal needs to get done as part of the state’s massive budget agreement, Visnauskas pointed out that the growth targets are linked to the infrastructure and planning assistance funds proposed by the governor and Legislature.

“All those things, from my perspective, seem very much tied up in a budget conversation. These housing policies are very much related to the dollars that are in the budget. So I think it has to get done now,” she said. Some legislators have floated the idea of negotiating housing policy in the post-budget legislative session. Most experts and advocates agree that for Hochul to pass something truly transformational for the state’s future, it should be done in the budget, where the governor’s leverage is strongest and the opportunities for grand bargains are biggest.

“It has to get done in the budget,” said Fee. “The governor has no leverage to do this outside the budget process.”

There are also tax incentives that Hochul and others, like Mayor Eric Adams, have argued are crucial to the success of the plan. Both Adams and Hochul have insisted on the need to replace the 421-a affordable housing tax credit, which expired last year. Hochul had proposed and later abandoned an alternative 485-w proposal, which she did not revive this year. Instead she proposed an extension on the completion deadline for buildings to receive 421-a credits, and has put the onus on the Legislature to come up with a new replacement program.

But it's not just the fiscal implications that matter. Hochul came into her first full-term after a bruising election. She bested her Republican opponent, then- U.S. Rep. Lee Zeldin, by just six points, the closest governor’s race in decades. Then, she expended significant capital when she unsuccessfully nominated Hector LaSalle as the state’s next chief judge, rebuked by the State Senate, which rejected his nomination. Hochul is also now, for a second year in a row, insisting on changes to the state’s bail law in order to move ahead on the budget overall, frustrating many legislators and leading to questions about whether she will be able to get as much of her housing plan passed as she could have if she made it the top priority in negotiations.

While Hochul appears to have the most on the line politically, there’s also the imperative for legislators to act, as the housing crisis has continued to become more acute, deemed by many as a leading cause of the state’s population loss over the years.

“I don't think there's any point in kicking this can down the road. It's been kicked several times already,” said Fee, who has met with many legislators and others to pitch the Compact and potential compromises. “Coming out of this pandemic, it feels like we have really such intensity around our housing crisis right now. There are so many households with significant arrears at risk of eviction. There are so many migrants coming to New York and we have no housing to offer them. Between rents and home prices, both have gone through the roof. And all of that, to me, points to, we need to add more housing.”

Gray from Open New York echoed that concern. “We absolutely have to do this in the budget,” she said. “We don't have time to waste with people sleeping on the street, with people getting displaced right now, and with people just really not nearly having enough housing opportunities. And we're really supportive of tenant protections as part of a package as well, but it's just the act of taking meaningful steps to solve the housing crisis. You can't wait another year.”

‘A Real Legacy for Her’
While the conversation around bail reform has sucked all the oxygen out of the room in early final-stretch negotiations between the governor and the Legislature, her housing agenda has the promise of becoming a major legacy item of her tenure.

“If the Housing Compact is enacted, this will be a landmark legislation for the governor,” said Fee, “and it's a politically brave move and one that she knew would be faced with resistance, and she's moving forward anyway, because she thinks that's the right thing to do in New York, and one that's going to help solve our affordability crisis.”

“This is the first governor that has prioritized housing in the way she has, prioritized zoning reform and really started to tackle these issues in the way that she has,” Gray said. “I absolutely think that this has all of the ingredients to be a real legacy for her.”

“Certainly, yeah, it's a legacy project,” said Queens Borough President Donovan Richards, who has been supportive of housing and economic development in his borough and beyond. More housing supply is particularly necessary as Queens feels the squeeze from neighboring Long Island communities that have failed to grow, he said. But he did say that the success of the Compact will depend on implementation and investment. “Even if it passes, there's no magic wand that all of a sudden increases housing tremendously,” he said. “Different tools need to be put in place that would enable things to actually be built.”

Richards is among several borough presidents who are eager to see more housing built in their boroughs and who have praised Hochul’s proposal, as has Mayor Adams, who sees Hochul’s plan as potentially very helpful to his own plan to build 500,000 units of new housing over a decade.

“No New York governor has ever tackled this the way she’s proposing to,” said Sean Campion, Director of Housing and Economic Development Studies at Citizens Budget Commission (CBC), a nonprofit group that has examined New York’s slow pace of housing growth and the impediments to fixing it. CBC, like Open New York and New York Housing Conference, is supportive of the Housing Compact.

He noted, however, that other states have already gone down this road and are building far more housing than New York. “Yes, it would be truly part of your legacy if it passes,” he said of Hochul, “and succeeds at increasing production, but this is just a basic thing that almost every other state in the country acknowledges is the problem and is trying to do something about.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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'Those are the Things That Keep States Strong': Senator Krueger on Top Priorities and Budget Negotiations


Senator Liz Krueger (photo: NY Senate)


Lawmakers in Albany are in the midst of crafting a new budget, with negotiations now stretching beyond the April 1 start of the new fiscal year. Democratic Governor Kathy Hochul and the two houses of the State Legislature, both with Democratic supermajorities, are likely to pass a budget “extender” so the state can pay its bills, especially payroll, as they continue negotiations this week.

State Senator Liz Krueger, a Manhattan Democrat who leads the Senate’s finance committee, has been at the center of the budget process, co-chairing weeks of legislative hearings on Hochul’s $227 billion executive budget and helping to craft the Senate’s one-house budget resolution, which was passed mid-March.

Just after both houses passed their one-house budgets and negotiations with Hochul’s office were set to intensify, Krueger joined Gotham Gazette’s Max Politics podcast to discuss Senate Democrats’ priorities, negotiations with the Governor, and more.

Hochul’s executive budget, released February 1, and building upon her January State of the State policy agenda, set the stage for the process. The governor, who just won her first term in the role but is negotiating her second budget since ascending from lieutenant governor, included many proposals in her budget, taking on a wide range of issues and offering several measures controversial with the legislative majorities. They included a sweeping and ambitious housing plan, a push to increase the cap on charter schools in New York City, further changes to the state’s bail law to allow for more pre-trial detention, a plan to fund the Metropolitan Transportation Authority (MTA), major climate and energy policies, and much more.

On the podcast, Krueger offered a broad response to the governor’s agenda, in large part through the lens of the Senate’s one-house budget. She stressed that while lawmakers are opposed to a number of Hochul’s ideas, there’s agreement on many others, and room for negotiation on key areas where there is disagreement.

“It’s quite the challenge to narrow that down into an actual sort of summary of what our budget would support and not support in the governor’s budget, what we would add, what we would subtract, and what we would replace,” Krueger said of the process of crafting the one-house budget resolution, which is non-binding and more of a negotiating document. “It’s fairly complex, and we come out with a very long laundry list of things we agree and disagree with."

Of the final stretch of budget negotiations, Krueger said, “It’s the staff of a governor, the Assembly, and the Senate in rooms together saying, ‘OK, this is what my house wants. This is what my house wants. This is what the governor wants. Can we come to an agreement? Can we agree to throw it away because we’re never going to come to an agreement? Can we negotiate something we can all live with?,’ And we build toward a final set of budget bills that need to pass both houses.”

Of the potential for budget negotiations to go into April, past the start of the new fiscal year, as they now have, Krueger said, “I’ve been here 20 years, and I always tell everyone, ‘Bring extra underwear.’”

On the podcast, Krueger touched on many of the Senate majority’s priorities and responses to Hochul’s proposals, the status of budget negotiations at the time in mid-March, and what she expected to come.

Criminal Justice
On the issue of criminal justice and how it fits into this year’s budget, Krueger said legislators have “a much longer list than we think the governor does.” While bail reform has been a controversial and dominant issue for years and is again this year, Krueger said there is little appetite for revisions again this year.

"We've done bail reform several times,” Krueger said on the podcast. “We've done hearings already this year looking at the data that's coming out. I don't think there's much room in either house of the Legislature to take on bail again."

“There’s criminal justice issues we would love to come to agreement on, but we don’t think the actual problem of growth in crime was caused by bail or that it’s creating a new problem, so we would much rather focus on the other issues in crime,” Krueger continued. “We’ll see whether the governor’s willing to do that.” Indications before and after those comments are that Hochul is insistent again this year that changes to toughen the bail laws must be made in the budget, and like last year, it is proving key to why the budget is late.

Krueger, who was the lead Senate sponsor of the law that legalized adult use of cannabis in New York, also discussed efforts she’s leading that could be part of a budget deal to increase penalties on businesses selling illegal cannabis products, as well as for those who knowingly lease commercial space to the rapidly proliferating illegal smoke shops.

“The bill would significantly increase penalties on the illegal shops, because right now they don’t really think they face any penalties except an occasional sheriff coming through and pulling the stuff off their shelves — no other penalty, and that’s not working,” Krueger said. “What they’re selling is illegal product coming in from other states, that we don’t even know what it is, and the testing shows that some of it is pretty crappy stuff.”

There appears to be alignment among Hochul and the Legislature on taking some such measures, but the final details as yet to be seen.

Although she said that she does not intend to re-criminalize cannabis by means of fines, Krueger said she wants police departments across the state to understand that they have more authority than she currently sees them enforcing against the shops selling illegally, which has been a point of contention in New York City where Mayor Adams, the NYPD, and the Sheriff have performed limited enforcement. She said the bill would allow law enforcement to revoke tobacco and CBD licenses for good if sellers are caught peddling illegal cannabis products.

Education
In light of Governor Hochul’s controversial proposal to raise the cap, which has been hit, on charter schools in New York City, allowing for around 100 more of the privately-run public schools to be authorized.

“The city of New York doesn’t seem to want the expansion of charters, and the Legislature doesn’t want the expansion of charters, so I just don’t think there’s a lot of room there for any negotiations,” Krueger said on the podcast.

She acknowledged that Mayor Adams may be supportive of charter schools but noted that during his state budget testimony to the Legislature he said the city does not have the money to spend on rent for more charter schools, which by state law must be given school space at the city’s expense, whether in public or private buildings. Krueger said that the Legislature does not intend to allocate the roughly $1 billion the mayor asked for to pay for charter school rent if the cap is raised.

Krueger also noted that it’s a priority for the Legislature to pass and fund universal free school meals — meaning all children across the state could access free breakfast and lunch every day at school.

“Everyone seems to recognize the importance of children having nutritious meals,” she said. “They learn better, they have better IQs, they’re healthier. It’s a very low-cost option to really address the issues for so many children in the state.”

Housing
On housing and the governor’s major ‘Housing Compact’ plan, Krueger said Hochul’s language in her proposal “did not seem to be satisfactory to almost anyone.”

Hochul’s plan would add 800,000 new homes to the state in the next 10 years through the use of mandatory local growth targets, zoning mechanisms, and many other planks.

“Housing is absolutely critical, but there was so much disagreement with almost every one of the governor’s proposals,” Krueger said of how the Senate crafted its one-house budget, which stripped out most of Hochul’s proposals but did keep the growth targets, albeit not required, and additional incentive money for infrastructure for localities that do welcome housing production to meet the state’s massive need. “We don’t want to leave Albany this Spring without dealing with the housing crisis, but most of the governor’s proposals were not the ones that were going to go.”

Krueger's mention of Spring was indicative of her belief that much of housing policy could potentially be dealt with in the legislative session after a budget, given that the session runs into June. But other legislators and members of the Hochul administration insist housing must largely if not fully be dealt with in the budget.

Krueger added that the Legislature’s priorities on housing include significant rent-arrears funding for the New York City Housing Authority (NYCHA), funding for the Homeowner Protection Program, which provides legal assistance and resources to homeowners facing eviction, and other policies that are not focused on housing production.

On growth targets and mandates, Krueger said there are localities where many officials say they want to build more and they can now do so, without state action, even if there is less will other places. “When you look at the City of New York, we have elected officials who say they want all this to happen,” Krueger said on the podcast. “When you look at other counties, they don't always say they want this to happen, as you’ve pointed out with Long Island. So that’s why I’m trying to point out that maybe different carrots and sticks work differently in different parts of the state.”

Krueger indicated that the Senate’s budget was not a final offer in negotiations, but a starting point from the majority’s perspective, and that on growth targets, transit-oriented development, and more, there is room for discussion.

Krueger said she is open to Hochul’s proposal to convert commercial buildings to residential spaces, but added that she is pushing for mandatory affordable units as part of any shift in regulations. She also said that she is not against the governor’s proposal to authorize legal basement units in New York City, and believes that the city has a lot of potential to build in that direction.

Taxes and Tax Breaks
The senator added that despite Hochul’s pledge not to raise any income taxes this year, legislators in both houses have proposed a small income tax increase for those who make $5 million or more each year.

“We believe that the amount we’ve proposed increasing, on $5 million and up, would not impact people picking up and leaving and stop doing business in New York, but that money can go an incredibly long way to help us pay for the priorities that make the state a great state,” Krueger said.

Krueger asserted that people are more likely to stay in New York or locate their residences and businesses here if budgets invest in bolstering infrastructure, and bettering quality of life, rather than focusing on minimizing tax rates.

“We have money to invest in education because what do businesses want? They want an educated workforce to work for them, they want access to utilities, and we’re heading rapidly to a green economy of green utilities,” Krueger said. “Those are the things that keep states strong, and actually help them pull out of bad economic times quicker.”

Krueger maintained that she is against Governor Hochul’s proposals to increase the state’s film and TV tax credit program to $700 million per year, but said that she was overruled by other legislators and the Senate budget supported the increase.

“If I was queen for a day, I probably would not be including that in the budget, but I have total respect that I am one legislator who needs to negotiate with my own conference as well as the Assembly and the governor,” Krueger said on the podcast. She said she is, overall, against various tax credit programs and other business deals, and against the governor’s proposed state loan for a complete renovation of Belmont race track, which was also supported in both legislative houses’ budget resolutions.

Other Issues
The interview also touched on MTA funding, cost-of-living increases for workers at nonprofits the state contracts with, climate policy, and more.

“We put a lot of proposals in for our commitment to a green system of energy and the economy, and some revenue sources,” Krueger said on the podcast. “I keep telling everyone: If we don’t get climate change right, it doesn’t really matter what else we do, because we won’t be around to deal with it.”

Listen to the full discussion here.

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by Abby Wilson, Gotham Gazette

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Uncertain Future for New Public Campaign Finance System in State Budget Negotiations


Inside the State Legislature (photo: Mike Groll/Office of Governor Kathy Hochul)


Despite funding in the executive and legislative budget proposals, lawmakers have not ruled out shelving the state's fledgling public campaign finance system for the upcoming election cycle.

Rumors that lawmakers were considering delaying the new small-dollar matching program as part of budget negotiations have been swirling since such talks were first reported by Spectrum News in late February. A few weeks later, however, the State Senate and Assembly one-house budget resolutions each met Governor Kathy Hochul's proposed $39.5 million for the new system – including $25 million for matching funds and $14.5 for administration.

But the apparent accord on the program has not been enough to assuage fears among reformers that the long-sought public financing system will be postponed in the adopted budget. A spending and policy plan is due by the April 1 start of the new state fiscal year, though budgets in Albany are often late.

Passed by Democrats in 2020, the system applies to candidates for statewide and state legislative seats, lowering individual contribution limits to candidates and establishing a public matching fund that multiplies low-level in-state or in-district contributions. Proponents, including many of the Democrats who currently make up supermajorities in the Senate and Assembly, argued the system would help reduce the impact of deep-pocketed donors in elections, encourage candidates to engage more voters, and make elections more competitive.

The public funds, offering a 6-to-1 match or greater to donations up to $250, are set by law to begin being paid out in the next state election cycle — the 2024 races for all 213 seats in the State Legislature. The Public Campaign Finance Board that is administering the program has already been appointed and for the past few months has been hiring staff, holding trainings, and setting out regulations for the system.

Despite the progress (and $20.6 million already allocated by lawmakers last year), the program's fate remains uncertain. Last week, Senate Majority Leader Andrea Stewart-Cousins avoided ruling out the possibility of delaying the implementation of the matching funds program when asked about it on The Capitol Pressroom.

"I have no idea," she told host David Lombardo of the chances of postponing the program in the adopted budget. "Both of our houses had campaign finance as does the governor's, so I have no expectation of anything falling off the table but we'll see."

Stewart-Cousins is one of three top officials, along with Hochul and Assembly Speaker Carl Heastie, all Democrats, who are leading negotiations of a roughly $230 billion state budget.

A coalition of advocates for campaign finance reforms and the public matching system are in Albany this week pushing to make sure the funding is in the final budget with no postponement.

“As the budget is finalized, our state’s leaders must cement their commitment to this groundbreaking program – not only by funding it, but also by ensuring that it remains available to candidates for the 2024 elections, some of whom have already started opting in," wrote Joanna Zdanys, senior Counsel at the Brennan Center for Justice and a member of the coalition, known as Fair Elections NY.

"Recent news pieces have reported rumblings that some lawmakers want to see the program delayed. There is absolutely no reason to do so," Zydanys told Gotham Gazette. "The program is ready to go, and this reform – which New Yorkers have long called for, and support by large majorities – is an essential way for everyday voters to have a greater say in our state’s politics.”

Asked to respond to Stewart-Cousins' remarks, a spokesperson for Hochul pointed to the governor's commitment in the executive budget.

"Governor Hochul's Executive Budget makes transformative investments to make New York more affordable, more livable and safer, and she continues to work with the legislature to deliver a final budget that meets the needs of all New Yorkers," wrote the spokesperson, Hazel Crampton-Hays, by email.

Lawmakers have expressed to advocates that part of the concern is over the expected price tag of the public match in the next state elections – estimated at $100 million, a majority of which would need to be included in next year's state budget if it is not included in the upcoming plan. But few have spoken publicly on the record about the status of talks.

On Thursday, a group of advocates and legislators spoke against defunding or delaying the program at rally in the State Capitol hosted by Fair Elections NY.

"For people who want to stop it, we are here to say you can't," said Assembly Member Harvey Epstein, a Manhattan Democrat. "We passed it because we're going to fight for it and are going to ensure that the money stays in the budget [and] there is no delay. There is no reason to delay."

"I'm hopeful as budget negotiations continue that we can get what we fought for," said Assembly Member Linda Rosenthal, another Manhattan Democrat, who also spoke at the rally.

Democratic Senator Rachel May of Syracuse said she "desperately" wanted to see the system in place for the 2024 state elections. "I'm proud that our majority leader supported putting the money in the budget this year and I will work with her to make sure that it stays," she said.

Spokespeople for Stewart-Cousins and Heastie did not provide statements in response to requests for comment. Nor did the chairs of the Legislature's finance and elections committees.

Senator Jessica Ramos, a Queens Democrat and longtime proponent of a public campaign finance system, defended the program but didn't rule out a delay. "I maintain that public matching is an important tool for the health of NY's democracy," she said in a statement provided by a spokesperson when asked if she was open to postponing. "The budget process is moving forward and we will see what the final language looks like as it progresses."

Reached by phone, Assembly Member Jeffrey Dinowitz, a Bronx Democrat, was not unsettled by the idea of postponing the system and painted the start-date of the campaign finance program as a question of preparedness.

"I don't think it would make a big difference," he said of a potential delay. "We have to make sure it's ready to be up and running."

Some lawmakers are still looking to make changes to the program even with Board operations underway.

A day after Hochul announced her $227 billion executive budget, Dinowitz introduced a bill that would eliminate the requirement that only funds from small donors (below $250) would be matchable; instead the first $250 of any sized contribution, up to the maximum limit, would be eligible for matched dollars. Some advocates are concerned the change would eliminate the advantage of seeking small donations and nullify a key feature of the legislation: to limit the influence of big election spenders and encourage candidates to focus on a broad swath of voters and donors.

"People are going to give what they want to give, what they're able to give. I think if the intent is really to force contributors not to give more than $250 then that's almost coercive," he said, noting that the purpose of the bill is to bring the state system in line with New York City's lauded campaign finance program, which matches contributions over the small-dollar threshold.

The bill has the co-sponsorship of a number of progressive Assembly members including Rosenthal and a number of democratic socialists. But it has no counterpart bill in the State Senate.

"That's probably a post-budget discussion and we have plenty of time for that," Dinowitz said of getting one. "Plenty of time."

***
by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

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