Gotham Gazette

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Deal or No Deal? State Budget Negotiations Drag & New York City Waits

Cuomo desk

Cuomo (photo: The Governor's Office)

Though Governor Andrew Cuomo and legislative leaders indicated for more than a week they were "very close" to a budget deal, negotiations appeared to collapse on Wednesday, and senators were sent back to their districts for their regularly scheduled Passover and Easter break. Cuomo held a press conference at the state Capitol outlining areas of agreement and major sticking points, but he indicated negotiations would continue - at some point.

Now, seven days into the new fiscal year, it appears that a new compromise on a full year’s budget is close. Final details have yet to emerge, but word began to circulate Thursday that the governor and legislative leaders had ironed out the remaining points of contention, or were on the verge of doing so. Nothing had been announced as of noon Friday.

Having missed the April 1 budget deadline, lawmakers passed Cuomo's budget "extender" on Monday, then kept negotiating to lock down a final spending plan for the full fiscal year before they planned to depart Albany for the two-week hiatus.

On Tuesday, the Senate passed six of 10 necessary budget bills, and the Assembly passed four of them Wednesday afternoon and two more on Thursday. A non-controversial debt service bill had been passed last week. Friday could see the final budget bills printed, debated, and voted on, but the situation remained fluid mid-day Friday. The broad contours of a “framework” deal among Cuomo, Heastie, and Flanagan could come at any moment. Or, negotiations could go on for weeks.

Bleary-eyed legislators from both houses expressed optimism that they would be voting through the final bills Wednesday afternoon, but Cuomo emerged at 6 p.m. -- without Democratic Assembly Speaker Carl Heastie or Republican Senate Majority Leader John Flanagan -- to inform the public that there was no deal.

Speaking to reporters in the Capitol's Red Room, Cuomo added that he would prefer holding off on finalizing the document due to the threat of budget cuts from the federal government, which itself operates under a continuing resolution, offering greater flexibility.

"Picking a number now, and saying this is going to be the number, and not knowing what’s going to happen next week and next month and when the federal government passes the budget or when they don’t pass the budget, or when they do the next continuing resolution, is very hard," said Cuomo, who again mentioned that everyone will know a lot more from Washington by the end of May, which is when the state "extender" runs through.

Lawmakers from both houses were quick to lash out at Cuomo over the breakdown, including Democratic Senate Minority Leader Andrea Stewart-Cousins. “What is happening right now is ridiculous. Dysfunction and chaos has descended on Albany. This situation has spiraled out of control and New Yorkers deserve better,” she said in a statement.

Senator Rich Funke, a Republican from the Rochester area, said in a statement, “There is only one reason we don’t have a final state budget right now and his name is Andrew Cuomo...The Senate has been working in good faith to deliver a budget that invests in our communities while protecting our taxpayers, but the Governor has been playing political games.”

Tensions between Cuomo and Assembly Speaker Heastie of the Bronx, who represents New York City’s interests in state budget negotiations, appear to be at least partially behind the blow-up.

During his press conference, Cuomo outlined several areas where agreements had been reached, giving a fuller view of what the $162 billion budget would look like when passed, and explained the major hold-ups in reaching a final deal. The governor indicated agreement on tax policy, ride-hailing for upstate and Long Island, workers’ compensation reform, and more.

Cuomo highlighted three major sticking points: raising the age of adult criminal responsibility, the 421-a property tax abatement program, and education funding, especially around charter schools.

While Cuomo insisted that legislators were headed to break and they’d look to pass the full budget later this month or next, Assembly members said they were staying in town and ready to work.

On Thursday it had become clear that Heastie and Flanagan had returned to the negotiating table with Cuomo, and the three were close to finalizing the loose ends.

As of Thursday night, the final three budget bills -- operations, capital, and revenue -- had yet to be printed and sent to the Legislature by Cuomo's office. The most loaded of the bunch will be the revenue bill, known as the “big ugly,” which is expected to contain the more controversial items in the budget, such as upstate ride-hailing, the millionaires’ tax extension, 421-a, and Raise the Age, as it is known.

Assembly Speaker Heastie told reporters at about 4 p.m. Thursday that they were “headed towards a full budget deal -- today or tomorrow.”

A spokesperson for the Senate majority leader said Flanagan needed to discuss the proposed changes with his conference members, who would presumably be called back to Albany if an agreement was reached. "While we have had these discussions, there is no final deal," said Flanagan spokesperson Scott Reif in an emailed statement at 5:30 p.m. Thursday.

As New Yorkers all over the state and Mayor Bill de Blasio and others in New York City await the details of a new state budget, as of Thursday evening a partially clear picture has emerged of what’s in store for the big apple for the coming fiscal year.

De Blasio put a good deal of energy into pushing a “mansion tax” he wants the state to allow the city to levy. It would charge the buyers of residential property over $2 million extra in order to pay for senior affordable housing subsidies. The mayor also supports the extension of the millionaires’ tax. Cuomo said Wednesday there is an agreement on extending the expiring millionaires’ tax, which is not expected to include the Assembly’s proposed expansion, but did not indicate for how many years. The governor has argued that the state cannot go without the revenue from the extension of the tax. Earlier this week, Cuomo dismissed the mansion tax de Blasio wants, and there has been no indication it has any life in negotiations.

Notably slipped into the extender budget is an allowance for billions of dollars a year in spending for all of Cuomo’s signature economic development and infrastructure projects, include major New York City projects -- including an MTA subway expansion and transformations of Penn Station and Laguardia Airport -- and the next phase of the Buffalo Billion. When a full fiscal year budget it passed, it is likely that these funds remain intact in full. On Wednesday evening Cuomo touted the fact that even in the extender he had ensured his signature efforts were fully funded.

Before talks collapsed, there was also a tentative agreement for Cuomo’s $200 million Empire State Trail, which would connect New York City with Quebec, Albany, and Buffalo, reported The Buffalo News.

Charter Schools
A charter school tuition freeze, first implemented after the recession in 2009, is set to expire in June. When the law expires, charter schools would automatically receive a $1,500 increase per student, paid for by the local government.

Charter school advocates and their allies among the Senate Republicans are, naturally, pushing for the Legislature to let the freeze expire. This would mean a $2 million burden for New York City, according to Cuomo, who said he is urging leaders of both houses to move to prevent this increase by finding middle ground.

“The Assembly must act or they are giving charter schools a $1,500 increase. The Senate must agree to act because if the Senate doesn’t agree, the increase automatically goes through in June. So that has taken the normal education discussion of “fair” in upstate and downstate and added a significant wrinkle,” Cuomo said on Wednesday evening.

Politico NY reports that there may be a compromise in the works, in which the freeze would continue, but charter schools would still see a boost in per-pupil tuition reimbursements.

The cap on charter school expansion across the state, particularly in New York City, is also an issue to watch. Cuomo and Senate Republicans want the cap lifted, but it is not clear if there has been any movement on this with the Assembly, which is staunchly anti-charter. Charter school provisions are often traded for things like mayoral control of city schools or additional education aid to the broader public school system.

421-a & Affordable Housing Money
Heastie said Tuesday that there was significant agreement on the new 421-a property tax abatement program that is meant to spur affordable housing development in the most expensive New York City neighborhoods, and that while there were still concerns, the Assembly would pass Cuomo’s version, known as Affordable New York.

Cuomo said Wednesday that the agreement hit a snag, because previously 421-a renewal was linked to rent regulations, meaning both programs would expire at the same time. “They are now separated, because of the delay in passing the new Affordable New York program. So that is an issue of concern more in the Assembly,” said Cuomo. Two years ago, when 421-a expired, the state extended the laws governing rent regulated apartments.

A consensus on 421-a could move along the release of $2 billion in affordable housing and anti-homelessness funds. The funds, allocated last year, will only be released once Cuomo, Flanagan and Heastie a memorandum of understanding (MOU), detailing how the money will be spent.

Mayor de Blasio, who has repeatedly called on the state to release the affordable and supportive housing funding, as well as money earmarked for NYCHA repairs but not spent by the state, has been skeptical about a new 421-a deal.

“421-a in the past was a giveaway to developers and it often funded luxury housing,” de Blasio said on Friday morning’s The Brian Lehrer Show on WNYC. “We have to be a lot better in terms of what the taxpayer gets for this subsidy....I would say it’s not by any means 421-a at all costs, it’s if there is a fair 421-a – a bill, then the good part is it does help foster the creation of affordable housing we need. But if it’s too burdensome to New York City, you know, it’s a different matter. So, it’s literally being – last report I hear just minutes before the show – things are still being hashed out.”

Raise the Age
A priority for the Assembly, raising the age of adult criminal responsibility from 16 to 18 years old, has repeatedly been cited as a sticking point during the last weeks of budget discussions.

While New York is among just two states in the U.S. to charge 16- and 17-year-olds as adults, previous efforts to end the practice were blocked by Senate Republicans. As New York City eyes a plan to continue reducing its jail population and close down the Rikers Island jail complex, raise the age is seen as one key component. Harrowing stories, like that of Kalief Browder, who was held for three years at Rikers without a trial, following his arrest for allegedly stealing a backpack at age 16 and not being able to post bail, helped push the issue into the limelight.

On Tuesday, Heastie had indicated that his conference was willing to accept a compromise, but by Wednesday the issue was reopened over which agency, corrections or the Office of Children and Family Services, should supervise discharged teens, according to lawmakers.

“Raise the Age, remember, we’ve talked about for many, many years, and it hasn’t passed for many, many years, because it really is the most political, polarizing issue,” Cuomo said Wednesday evening. “Criminal justice laws are usually lightning rods for ideological differences. And raise the age poses a very important, but controversial hearing.”

Asked about Raise the Age and the final negotiations in Albany, de Blasio said Friday morning on WNYC, “I care that whatever we do is going to focus on rehabilitating these young people although, obviously, some young people commit very serious crimes. I don’t take that lightly. But the goal here of course underneath the whole concept of Raise the Age is trying to recognize that a lot of our young people who go astray are particularly redeemable because it’s still early in their development.”

School Aid
Of the $961 million statewide aid increase Cuomo outlined in his executive budget for the 2017-2018 school year, New York City schools would receive an increase of $294.9 million. Both Legislative houses, in their one-house budgets, called for education aid to be increased.

In the absence of a full, permanent budget, Cuomo said schools to plan for the 3.9 percent funding increase outlined in his budget proposal. “If the actual budget winds up being a little higher, then so be it. But the 3.9 percent I think is a safe planning number,” Cuomo said on Wednesday evening.

College Affordability
There also appears to be consensus on college affordability, which is likely to include some form of Tuition Assistance Program expansion, but does not include the Dream Act, which would grant tuition aid for undocumented immigrants. Cuomo had made free tuition at CUNY and SUNY schools for students from families making $125,000 or less annually his top agenda item at the start of the year. It is not clear yet to what extent Cuomo will get what he had outlined.

Mayoral Control of City Schools
Before talks collapsed Wednesday, the Daily News had reported that the parties agreed to include in the budget a one-year extension of mayoral control of New York City schools. It would be the third straight one-year extension for Mayor de Blasio, an ongoing insult to the mayor, but having it done in the budget as opposed to the legislative session to follow would be something of a win for the mayor.

Ethics & Voting Reform
There has been no movement from the governor and legislative leaders on government ethics, campaign finance, or voting reform. On the Senate floor Tuesday, Democratic senators tried to propose hostile amendments to the budget bill that pertains to public protection and general government (PPGG). The amendments related to Planned Parenthood funding, limits on outside income for lawmakers, LLC loophole closure, and no-fault absentee ballots for early voting. The amendments were ruled as non-germane by Acting Senate Chair Joseph Griffo, an upstate Republican. Mainline Democrats moved to appeal the ruling -- which would force a debate and vote on the issues -- but members failed to garner a majority show of hands to support their appeal.

Cost Shifts & Cuts
During his budget testimony, de Blasio pushed back on the more than $100 million in cuts and cost shifts to New York City proposed in Cuomo’s executive budget, primarily related to placement of foster children and special education services. A spokesperson for the mayor’s office said it is still too early to tell if those cuts would make it into the final document.

by Rachel Silberstein, State government reporter, Gotham Gazette

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