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New York City Interests Given Varied Priority in Three Albany Budget Plans


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De Blasio & Heastie (Michael Appleton/Mayoral Photography Office)


Mayor Bill de Blasio didn't need to see the Assembly and Senate one-house budgets to know where he stands with each chamber - Assembly Speaker Carl Heastie is a close ally of the mayor, his fellow New York City Democrat, while Senate Republicans hold a major grudge against de Blasio for leading a failed effort to boot them from the majority two years ago. Most Republican legislators, who control the Senate but not the Assembly, are also philosophically opposed to much of de Blasio's agenda.

Still, the documents give de Blasio - himself in the midst of a city budget process that depends quite a bit on state decisions - more clarity as budget negotiations truly heat up in the capital. With the governor's executive budget out for two months, plus the newly passed one-house budgets, de Blasio now has an idea of how hard a fight he and his allies have to get what they want.

The Legislature uses one-house budgets to set chamber priorities after analyzing the governor's spending plan, which is typically issued at the start of the year. The budgets are non-binding but used to send clear messages about majority conferences' top priorities before entering final negotiations with the governor.

While there are a variety of city-specific issues at play, de Blasio has made it clear that he is supportive of Cuomo's push for both a minimum wage increase toward $15 per hour over the next several years and a paid family leave policy. These are two major agenda items for the governor, where Cuomo laregly has Democratic support but must negotiate deals with Republicans.

With all three budgets out, Mayor de Blasio, city officials and residents are all taking note of where things stand on several other major issues.

Mayoral Control of Schools
Cuomo: The governor's budget includes a three-year extension of mayoral control, which is fairly short compared to the seven-year extension Mayor Michael Bloomberg was able to win during his tenure. Last year Cuomo also proposed three years, but the three parties only agreed on a one-year extension in June, angering de Blasio and his allies. (The issue was bumped beyond the budget into legislative session last year, as it may again this year.)

Assembly: Mayor de Blasio's allies in the Assembly support a seven-year extension of mayoral control, which would make expiration June 30, 2023. Such a distant date would remove the issue from the political equation for years to come and prevent Cuomo and Senate Republicans from holding it over de Blasio's head, even through a potential second term for the mayor.

Senate: While addressing the chamber before the vote on its one-house budget on Monday, Majority Leader John Flanagan said that he didn't feel mayoral control was a budget issue. He indicated he expects to have relevant hearings later in the year where de Blasio will be asked to testify. When asked about attending hearings by Gotham Gazette de Blasio said on Monday that he had expected them and welcomes the chance to discuss mayoral control. He was quick to remind that he had already met with Flanagan and discussed the subject.

"I've already sat down with him, obviously, and talked to him about this," de Blasio said on Monday at an unrelated press conference in Harlem, referring to the mayor's trip to Albany earlier this year. "I certainly made my case to him, it was a very good and respectful meeting. I think he heard my points. I'm not saying he agreed with all of them, but he heard them. He knows a lot about education, obviously, from his own work on the education committee in the Senate. And I will welcome a dialogue. I told him I will happily appear at a hearing any time."

CUNY and Medicaid Cost Shifts
Cuomo: The governor's budget could cost the city nearly a billion dollars in funding through plans that would see the city assume increasing costs for Medicaid and funding for CUNY. The governor insists that the city can afford to take on a greater share of the costs of both city-state programs.

Facing criticism from de Blasio, his allies, and budget watchdogs who warned the shifts would devastate the city's finances, Cuomo insisted his budgeting would simply foster a joint cost-saving exercise that in the end wouldn't cost the city anything. However, no adjustments were made to the plan in the governor's 30-day budget amendments, leaving the cost shifts as an expensive bargaining chip. While aides to de Blasio and Cuomo have been in conversation, there has been no evidence of progress in finding such efficiencies.

Assembly: Assembly Democrats rejected both cost shifts, winning the praise of the mayor and education groups who have turned up lobbying efforts in recent weeks. Advocates say the cost shifts would devastate CUNY and make it much harder to provide higher education, especially to those who can't afford private school tuition.

Senate: Both proposals remain in the Senate plan. Debate over the CUNY shifts took a curious turn on Monday as Republican Sen. Cathy Young, the chair of the finance committee, offered a new rationale for the CUNY proposal: the cost shift as a punishment for recent anti-Semitic incidents at CUNY and what some lawmakers see as an inefficient response to them.

"In light of recent anti-Semitic events at CUNY campuses," reads the Senate's budget summary, "the Senate denies additional funding for CUNY senior schools until it is satisfied that the administration has developed a plan to guarantee the safety of students of all faiths. The Senate fully understands the importance of the City University System, and supports the full restoration of State support when this difficult and atrocious situation is adequately addressed."

Democrats were taken aback by the rationale. "Everyone agrees that anti-Semitism is bad. But the way you fight it is not by hurting the students," said Sen. Toby Ann Stavisky of Queens.

"This administration has been outspoken in ensuring that NYC continues to be a model for other cities in combating anti-Semitism," de Blasio said in a statement to Gotham Gazette. "Our institutions of higher education must be spaces where people of all faiths can thrive and feel safe, and CUNY must ensure that's the case. The best tool to combat hate is education - and we must be investing in it, not cutting it."

Tax-Exempt Affordable Housing Bonds
Cuomo: The governor's budget includes a proposal to give the state final say over housing projects financed by federal tax-exempt bonds the state distributes. The Public Authorities Control Board, made up of one appointee each from the Governor and legislative leaders, would have the ability to veto individual affordable housing projects. Cuomo touted the plan as lending transparency to the process, but contractors, housing advocates, Mayor de Blasio, and others expressed significant worry it would lead to instability, uncertainty, and delay to badly-needed affordable housing projects.

Assembly: Rejects the plan.

Senate: Rejects the plan.

De Blasio appeared buoyed when asked about both chambers rejecting the plan. "I think in the democratic system that's a rather striking statement," the mayor told reporters on Monday afternoon. "We said from the beginning that we thought this would make it harder to create affordable housing, and would slow the process down. It's quite clear the Senate and the Assembly agree, and we appreciate their support and look forward to working with them, because we need to, in fact, speed up the supply of affordable housing, not slow it down."

Construction Takeover
Cuomo: The governor's budget proposes the creation of "The New York State Design and Construction Corp." that would be given oversight of public construction projects worth over $50 million. The DCC would be a subsidiary of the state's Dormitory Authority and would be headed by three commissioners, all appointed by the governor. Budget watchdogs and legislators see the plan as a power grab designed to give the Governor say in major construction projects headed by independent agencies such as the MTA.

Assembly: Rejects the plan.

Senate: Rejects the plan.

MTA Funding
Cuomo: The governor's plan technically provides $8.3 billion in funding for the MTA capital plan, per an earlier commitment Cuomo made in striking a deal with de Blasio over plugging a funding gap. However, the governor's budget only appropriates $1 billion for the MTA this year and puts off the rest of the funding until the MTA exhausts its current resources.

Assembly: Rejecting Cuomo's condition that the MTA exhausts its current funding first, the Assembly plan appropriates the remaining $7.3 billion Cuomo's plan puts off.

Senate: Accepting most of Cuomo's funding plan, the Senate requires the state to provide $3.5 billion in additional funding to the Department of Transportation Capital Plan.

Tenant Protection Unit
Cuomo: The governor's budget recommends $4.4 million in funding for the agency he credits with restoring 50,000 units to the affordable housing rolls. 

Assembly: Provides a $5.8 million appropriation for the unit.

Senate: Denies funding for the unit.

Next Steps
On Tuesday, the two houses of the Legislature convened a joint hearing to kick off the formal conference committee process whereby representatives of each house meet to hash out the differences in their plans. Leadership announced committee hearings on public protection, mental hygiene, higher education, general government, environment and housing, transportation, economic development, human services/labor, and education all to take place throughout the day on Wednesday.

Cuomo, Heastie, and Flanagan are also expected to pick up their closed-door negotiations with the deadline for a final budget being April 1. When the state budget is decided, de Blasio will then have to weigh its impact on his budget negotiations with the City Council, with a final city budget due at the end of June.

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by David King, Albany editor, Gotham Gazette
     

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City Criticized for Again Lowballing Elections Budget


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Council Member Ben Kallos (photo: William Alatriste)


When the city's new fiscal year begins in July, the Board of Elections will be readying to administer two elections before the close of the 2016 calendar year: September primaries and the November general, which will include the presidential contest. This, after running elections in April and June.

To fulfill its duties and ensure smooth electoral processes, the BOE will need to hire and train thousands of poll workers, hold state-mandated voter registration drives and, given unforeseen circumstances, organize special elections.

(And, if Council Member Mark Treyger manages to pass a bill he recently introduced, the BOE will soon have to create an emergency response plan for holding elections during a crisis.)

It wasn't surprising then that City Council Member Ben Kallos, chair of the governmental operations committee, which has oversight of the BOE, at a preliminary budget hearing on Monday expressed deep dissatisfaction with how the Mayor's Office of Management and Budget (OMB) has consistently lowballed the BOE in preliminary budgets for three years running.

Bordering on anger, Kallos pointed out that the BOE preliminary budget allocation of $88.4 million is a steep drop from last year's adopted budget of $140 million. Kallos asked BOE Executive Director Michael Ryan if the low figure is sufficient for the somewhat monumental task of running elections in New York City.

"The short answer to that is 'no,'" Ryan responded. He estimated that the BOE would need $138.5 million for fiscal year 2017, which begins July 1, and that it was run-of-the-mill for the administration to set a "placeholder budget that encompasses all of the agency's absolute, ironclad, 100 percent obligations, contractual and otherwise." As with the last two years under this administration, Ryan said he expected full funding to be incorporated into the executive budget, which de Blasio will release later this spring.

This didn't seem to be the answer Kallos was looking for. He faulted OMB for engaging in a process that gives the Council little oversight over what ends up in the BOE's final budget. It "frustrates the purpose of preliminary budget hearings and this isn't happening at any other agencies," Kallos said, stressing that a better way would be to allocate a higher budget and then pullback as needed.

[Related: De Blasio Unveils Cautious $82 Billion Preliminary Budget]

Ryan did make allowances for OMB's process, calling the budget negotiations a "partnership endeavor" that always yielded the desired result. He stressed that the BOE budget was a "moving target" depending on the election cycle, but did concede that "$88 million is south of the bare minimum" for the BOE to run smoothly.

OMB spokesperson Amy Spitalnick, in a statement emailed to Gotham Gazette, echoed Ryan's rationale. "There is always some unpredictability and variability in what BOE requires each year based on the number of contested races, poll sites and workers, special elections, and more, which makes it impossible to baseline one set amount," Spitalnick said. "The City always funds what is needed later in the budget process, once many of those outstanding factors are determined."

Kallos, however, may not let that reasoning stand in the future. At the hearing, he promised to hold OMB feet to the fire if it continues to play a game of "cut and restore" with the BOE budget. "If OMB ever puts this low a number again," Kallos said, "I want them here for this hearing so that they can tell me why they think you should be able to work with $88 million."

"The elections in democracy are too important to be playing these games," Kallos added.

[Related: At First City Council Budget Hearing, Concerns About City Savings]

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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Sides Near Deal on Major Zoning Changes Aimed at Creating Affordable Housing


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De Blasio rallies for his housing plans (photo: Demetrius Freeman, Mayor's Office)


After months of public discussion and weeks of private negotiation, the City Council is on the verge of passing, with tweaks, two sweeping changes to the city's land use rules that are key to Mayor Bill de Blasio's housing plan.

Sources familiar with negotiations say that some details are still being worked through, but that the major tenets of the controversial changes to city zoning text are all but set. A deal may be announced as early as Monday afternoon.

With several alterations to the original proposals by the de Blasio administration, the Council is likely to vote Mandatory Inclusionary Housing (MIH) and Zoning for Quality and Affordability (ZQA) through committee this week. Then, the City Planning Commission will be asked to sign off on the changes to the plans that it passed earlier this year, stamping them as "within scope" and sending them back to the Council for a full vote on March 22.

Council votes in the zoning subcommittee and land use committee are likely to take place on Wednesday, though they could be moved if deemed necessary. But, indications are that discussions between de Blasio administration and City Council representatives are close to finalized. In news that signaled the end of what has at times been a contentious process, the de Blasio administration announced on Sunday that the coalition making the most noise in opposition to the structure of the plans had come around in support given new developments.

Most importantly, de Blasio will see his Mandatory Inclusionary Housing program enacted; the plan requires that real estate developers who receive an upzoning on a plot of land in order to build more housing than otherwise allowed will have to include a set percentage of units under specific rent thresholds. Negotiating parties are making slight but important changes to the structure of affordability levels within MIH, including set-asides for lower income earners than the plan had previously included.

With a series of recent endorsements and now the backing of Real Affordability for All (RAFA), a collection of community groups and construction unions, along with prior support from a variety of advocacy groups and other unions, de Blasio is set for a big-tent win. The City Council Speaker, Melissa Mark-Viverito, and Council members will also tout the new land use policies as major progress for the city, especially those in danger of being priced out of an increasingly expensive New York. Council negotiations with the de Blasio administration have centered on affordability levels, with the Council apparently able to move the needle in slight, but significant ways.

The two zoning changes are part of the administration's larger housing plan, which aims to build or preserve 200,000 units of affordable housing over ten years. Forty-thousand were secured during de Blasio's first two years in office.

"We're on the verge of implementing the strongest, most progressive requirement for affordable housing of any city in the country," said de Blasio spokesperson Wiley Norvell in a Sunday statement announcing the backing of RAFA. "We welcome this support, and look forward to working with communities across the city to identify even more tools to reach New Yorkers with quality jobs and affordable housing."

The backing from RAFA, which is spearheaded by New York Communities for Change, an organization at one point led by a longtime friend of de Blasio, Jon Kest, who passed away in 2012, comes after concessions by the administration. Not only has RAFA seen encouraging movement on affordability levels within MIH, but the administration also promised to conduct a study of tools it can use to deepen affordability and ensure "job standards in new housing." The coalition, especially its labor component, has been calling for both local hiring and construction safety precautions to be included in the plans.

The affordability levels within MIH have been the source of perhaps the most debate as the zoning amendments have gone through the public review process. Along with Mark-Viverito and Council staff, Council Member Donovan Richards, chair of the Council's zoning subcommittee, has been key in the negotiations. Council Member Jumaane Williams, chair of the housing committee, has been said to be the loudest voice pushing for deeper levels of affordability. It appears that in the final MIH structure, shifts will have been made to ensure some apartments for lower income earners and broader economic diversity within new developments.

Income levels are based on Area Median Income, currently $77,688 for a family of three. AMI is a federal measure that for New York City also includes data from surrounding suburban counties. Average incomes in the city are significantly lower, especially in neighborhoods the de Blasio administration is targeting for added housing density and community improvements. "Affordable" means that a family would not be spending more than 30 percent of its income on rent.

Throughout the public review process, fears of gentrification have been at the forefront. De Blasio, his representatives, and his allies argue that without a new program from the city, gentrification will continue largely unabated as it has in many communities over the past two decades. Some advocates and politicians have been calling for a mandatory inclusionary housing program for many years. As de Blasio moved forward with his plan, the big question became the exact numbers.

As proposed, the administration included three options for builders creating new housing on land rezoned under MIH:
> 25 percent of new units affordable to tenants making an average of 60 percent AMI
> 30 percent of units affordable to tenants making an average of 80 percent AMI
> 30 percent of units affordable to tenants making an average of 120 percent AMI - this third option would not come with added city subsidies; would not be available in most of Manhattan in an effort to create more economic diversity; and is often known as "the workforce" option, meaning that it is targeted more at middle-class households.

Negotiations appear to be yielding a couple of changes to that structure. One change is that instead of simply requiring rents for the affordable units to average 60 or 80 or 120 percent of AMI, there would be clear set-asides for some percentage of units to be affordable for those earning down to 30 percent of AMI. Another change would add a fourth option that gets at deeper affordability, possibly accompanied by a smaller percentage of affordable units, again in an effort to make some new apartments available to tenants with lower incomes. Two sources close to negotiations confirmed the outline of these changes to Gotham Gazette.

City Council members indicated they were looking for these types of tweaks during a February hearing on MIH, as did Council Member Donovan Richards, chair of the zoning subcommittee and one of the Council's lead negotiators on the subject, in an interview with Gotham Gazette. Details of the changes as part of negotiations were first reported by Politico New York earlier this month.

Mark-Viverito, the Council speaker, has, like many of her members, been a supporter of the plans from the start, but also interested in making changes, especially to affordability thresholds. Council Member Williams said he knows Mark-Viverito and Council Member Richards have been negotiating those numbers.

"The speaker and Donovan Richards are in there trying to push what many of us are asking for," Williams said in an interview on Friday. "All of New York has to see itself in this plan. If it doesn't, we haven't achieved what we need to achieve."

Williams referenced the push for a fourth option under MIH and the carving out of a certain percentage of units for those making the most modest incomes. "We want to make sure that there aren't parts of this city that are built with no deeply affordable units," he said. "There shouldn't be a project where some of the units aren't of the deepest affordability - 30 percent or below of AMI must be considered."

Meanwhile, it is still unclear if there will be modifications around other key points of contention, such as the building of affordable units "off site," as in at a different location than new market-rate units. Council members have expressed interest in disincentivizing the practice within the MIH language, perhaps by including language requiring more affordable units if they are built away from the market-rate units.

As for ZQA, which deals with a wide variety of more specific zoning rules, the parties appear to be coming to compromises around modifications to parking requirements that come with senior affordable housing and the distances in so-called transit zones. Details of the ZQA deal are said to be among those still being discussed as City Council members often have neighborhood-level concerns, especially around building heights, parking, senior housing, and retail space.

Much of the discussion around ZQA has related to the ways in which it will help create more affordable housing for seniors. AARP and other advocacy groups have backed the plan, with AARP-NY dedicating significant resources in support, rallying with the mayor, and lobbying Council members.

A spokesperson for Council Member Richards told Gotham Gazette that negotiations have yielded a deal on the minimum size of new affordable housing units for seniors, one point of contention in early negotiations. The de Blasio plan had put the minimum at 275 square feet, which Richards and others called too small, pushing for 400. The sides have agreed on 325 square feet.

The sides are said to be negotiating specific numbers around the number of parking spots that must accompany new senior housing and which areas of the city would still require special permits to build nursing homes, among other finer points. Politico New York has reported on already-decided changes to ZQA.

When a deal on MIH and ZQA is finalized, de Blasio and City Council members are likely to celebrate, these types of changes to city zoning rules do not happen often, and the mandate for affordable housing in any upzoned development is indeed a major win.

How prior critics of the plans, including many local community boards who voted against their initial construction, will react is unclear. While some have seen and will continue to see merit in the plans, fears of new real estate development, added density, and rising rents are very real and unlikely to abate. The de Blasio administration is also moving forward with a series of neighborhood rezonings, starting with East New York, Brooklyn, but soon moving to communities in each borough.

De Blasio is staking his legacy largely on his attempts to make the city more affordable and his housing policies will be a key piece of his 2017 reelection bid.

In endorsing the mayor's plans, the New York Times editorial board recently captured the moment, writing, "This grand plan is a hugely important gamble that the city can build its way to greater housing equality, that it can ignite growth, improve neighborhoods, tame gentrification and protect tenants, all at once. That New York can still be a mixed-income city."

Passing MIH and ZQA doesn't provide the result to that gamble, it pushes more chips on the table.

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by Ben Max, Gotham Gazette
     

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