All Eyes On Albany As Democrats' State Budget Comes Together

Marijuana legalization, which was a key component of Governor Andrew Cuomo's budget for this year, is now expected to be hashed out after the April 1 budget deadline, but before the legislature adjourns in late June.

Governor Andrew Cuomo has said it early and often: the pressure from the April 1st budget deadline helps focus the mind and resolve complicated and controversial issues—even when they have little or nothing to do with dollars and fiscal discipline.

Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins have pushed back on the idea that all of the major issues that Cuomo set out to accomplish in his "2019 Justice Agenda" needed to be sewn up in the budget.

In the end, some big-ticket items have gotten folded into the budget—or appear to be close—while others have been deferred.

Legalizing marijuana and renewing and reforming rent regulations are out of the budget and are expected to absorb much of the lawmaking energy between April and June.

Those issues could be joined by some of the following proposals, if they're not finalized early next week. The odds are fluctuating almost hourly up in Albany, which for the first time in a decade is completely controlled by Democrats.

Criminal justice reform

This is perhaps the single biggest sticking point. For days, insiders have been saying that two big reforms are largely settled—so-called "speedy discovery" and "speedy trial" measures that would accelerate defendants' trials, reduce their time in pre-trial detention and force prosecutors to share more evidence with defense attorneys. The thorniest of all is cash bail reform.

The governor and legislative leaders want to largely abolish bail, letting almost all people accused of crimes out on their own recognizance prior to trial. But that's a big "almost."

What's stalling negotiators is the list of exceptions—which, if any, violent felonies, felonies and misdemeanors could keep defendants in jail pending trial—and how much leeway judges should have. There is an immense amount of pressure to pass the entire reform package in the budget, to chalk up a big win for progressive Democrats. Odds are, they'll pass something, rather than hold up the whole budget—but the inability so far to close the loop on bail has many people wondering if it could get postponed until afterwards.

Congestion pricing

The Assembly and Senate appear close to reaching a deal, although the specific details have yet to be announced. The plan as the governor has described it is roughly based on last year’s Fix NYC report, in which charging drivers $10 to $15 to enter Manhattan below 60th Street (with the FDR exempt) would generate $1 billion a year, which the state could use to generate $15 billion in bonds to use for repairs.

The tolling infrastructure would be similar to the state’s E-Z Pass in which you’re either charged on your E-Z pass account, or a camera takes a picture and mails you a ticket. If it passes, congestion pricing could be up and running by December 2020.

Governor Cuomo said the plan would account for drivers that paid other tolls getting into the city—like those on the George Washington Bridge—although it’s unclear what discounts drivers might get. Transportation economist Charles Komanoff, who advised the governor’s congestion pricing panel, warned that even a 10 percent carveout for some drivers could result in a loss of up to $3 billion.

Cuomo has promised that any money generated for the MTA would go into a lockbox that could only be used for capital projects; the initial plan would’ve gone toward subway and bus improvements outlined in New York City Transit President Andy Byford’s $40 billion Fast Forward plan.

Now, Senator Tim Kennedy, the transportation committee chair, verified the outlines of the deal: 80 percent of the toll revenue would go to New York City Transit Authority for subway and bus improvements, with 10 percent each going to Metro North and the Long Island Rail Road.

Kennedy said the $1 billion-to-$15 billion numbers were "fluid"—and it could fall to a future commission to set the total revenue target and toll levels, as well as which bridges and tunnels would be exempt. Letting an unnamed blue-ribbon panel make the hard decisions is a time-honored tradition in Albany. So is the budget-time mantra, uttered repeatedly by Kennedy and others: "Everything is in flux."

MTA brass have warned that if congestion pricing doesn’t pass, they would be forced to raise tolls and fares by as much as 30 percent in the coming years. The agency is facing a $1 billion operating deficit in three years.

Curiously, when Cuomo released a 10 point plan to “transform” the MTA in February, he swore up and down that no new money would go the MTA, which he called a “disgrace,” until reforms to the organization were made, and one person could be held accountable. It's not clear if these proposals are still happening. (The governor used to be in charge of the MTA. He still is. But he used to, too.)

Pied-à-terre tax

The idea of a pied-à-terre tax—which would levy annual fees on second homes in New York City worth $5 million or more—has been kicking around for at least five years, but got a major boost when Governor Cuomo signaled his support for it earlier this month as a way to raise more revenue for transportation. After all, if hedge-fund billionaire and serial real estate collector Ken Griffin could buy a $238 million penthouse at 220 Central Park South, couldn’t he afford a comparatively modest tax on that record-setting purchase?

But there has been significant backlash from the city’s real estate industry, which argued the tax would severely hurt the luxury market, and state legislators, including Assembly Speaker Carl Heastie, began moving away from the proposal and instead were considering a one-time transfer tax on high-priced sales.

A source in Albany close to the negotiations also told Gothamist that there are some technical issues that might make the tax “difficult” to implement.

Manhattan State Senator Brad Hoylman, who has sponsored a pied-à-terre tax every year since 2014, has refused to back down. Hoylman has argued that the revenue from the tax would help the city repair and maintain critical infrastructure like the subway and schools. Annual revenue estimates have ranged from $372 million to $650 million.

"I’m not going to believe it’s dead until I see the body,” Hoylman told Gothamist on Friday afternoon, adding that no one in the legislature had approached him about revising his plan. Hoylman said reports he had read about a one-time transfer tax on real estate purchases concerned him because the revenues would be more subject to the real estate market's cycles. It was also not clear whether such a tax might affect a broader swath of buyers, such as those in the $1 million to $2 million range.

Education funding

Robert Jackson has staked his career on expanding educational funding—as an activist, City Councilman and now freshman Senator. On Thursday, he and a half-dozen Senate newcomers from around the state led a rally with hundreds of activists chanting outside Cuomo's chambers. They're seeking a $1.2 billion bump in so-called "foundation aid" for under-financed schools; tentative reports suggest the number is closer to $600 million.

Some legislators say that given the state's current financial strains, even getting that much would be a small victory. Assemblyman Charles Barron was having none of it.

"We can't come in with a budget that in many ways is worse than last year, when we had Republicans in charge of the Senate," he said, openly criticizing Heastie and Stewart-Cousins. "They say they can't find the money. Well, the governor's got his pet projects, let's stand up to him, and tell him we don't care about being on time or getting our raises—if we don't get more foundation aid, there's no budget." He acknowledged his voice is often a lonely one, and said though he'll try to steel his fellow Assembly members to stand up to the three leaders calling the shots, he wasn't sure how many he could get to follow his lead.

Public financing for candidates in state elections

New York City's revamped campaign finance system rewards candidates who garner small-dollar contributions by providing $8 to every $1 they receive (under certain caps). Meanwhile, Albany's campaign finance system is awash in dark money.

"New York State still has sky-high campaign contribution limits, still allows unlimited donations to party and legislative leadership 'soft money' housekeeping accounts, still permits unfettered campaign fundraising during the legislative session, and still lacks adequate independent enforcement," New York Public Interest Research Group's executive director, Blair Horner, wrote earlier this week.

Governor Cuomo, who recently held a $25,000-per-couple fundraiser (minimum contribution) at the St. Regis Hotel that featured his own budget director, said on Friday morning that he supports the push to create public financing on the state level, and that he thought he could get it into the budget. But would the prolific fundraiser use a matching system if one were available to him?

Asked if it's in or out of the budget, Bronx State Senator Alessandra Biaggi said, "I hope it is, but I just don't know."

Other items that appear to be finished, at least for the time being:

Permanent 2 percent property tax cap

Despite objections from many members in the Assembly and their backers in the education unions, Cuomo has invested heavy symbolic weight in this measure, so it is difficult to imagine him backing down. Still, as of Friday morning, it was not formally inked into budget bills.

The state already has a renewable 2-percent property tax cap—though localities can vote to override it—but Cuomo has said making it permanent will add some "stability," at a time when Albany is facing a state income tax revenue shortfall and Washington has steeply curtailed the deductability of state and local taxes, or SALT.

Plastic bag ban

Almost purely a policy item, this seems to be as completely resolved as possible—with the usual caveat that anything could change at the last minute. Most plastic shopping bags are to be outlawed, state-wide, as of next March, with a few exceptions, including dry-cleaning and restaurant take-out bags. Legislators and their allies in the environmentalist community wanted a shorter list of exceptions, and they also wanted a 5-cent fee on paper bags, to force people to carry reusable bags, but they lost to Cuomo. Instead, the nickel charge will be optional for counties and municipalities, which will have to opt to impose them.

With reporting from Fred Mogul in Albany, as well as Stephen Nessen, Elizabeth Kim, Jake Offenhartz, and Christopher Robbins.