Middle of the Middle

NY Budget Balancing Act, Grounding Planet Albany, Foreign Aid Flap

Author

Jack O’Donnell
April 01, 2024

Happy Dyngus Day from the Dyngus Capital of the World!

Today is the first day of New York’s 2024-2025 Fiscal Year and our budget is officially late.  Governor Kathy Hochul and the Legislature failed to come to an agreement ahead of today’s deadline. Instead, they passed a short-term budget extender that keeps government funded through Thursday, April 4th. Hochul indicated she believes a deal is within reach, but proceeded with the extender to allow lawmakers and legislative staff to spend Easter at home. In a statement, Hochul said, “While I believe a final agreement is within reach, I recognize many New Yorkers would like to spend the holiday weekend with family and loved ones. For that reason, I will be delivering a bill to the Legislature to temporarily extend the budget deadline until April 4th.”

Last week, Senate Majority Leader Andrea Stewart-Cousins characterized their progress as “the middle of the middle.” When the Majority Leader made that same comment last year, Politico’s Bill Mahoney calculated that it took another 33 days to reach an agreement on a final budget. While negotiations are unlikely to drag on that long this year, a number of complicated and contentious issues remain to work through. 

“(Governor Hochul) is leveraging moving the party a little more to the center…”

That’s according to our Jack O'Donnell as he talks to reporter Nick Reisman of POLITICO about the Governor’s budget battle with legislative leaders.

On Education funding, lawmakers are holding strong in their opposition to Hochul’s proposal ending “hold harmless”, but are eyeing other potential areas of compromise, including changes to the consumer price index calculations that govern school aid. Stewart-Cousins also floated the idea of expediting a proposed $1 million study on the efficacy of school aid. The Majority Leader offered, “We believe that we could do something sooner, and we have so many resources and technology. We’re using data right now that is over 20 years old, and that doesn’t seem like a good idea. I believe that we can do the work in a reduced amount of time and get to the point that we need to get.”  Hochul has called the idea of a study “kicking the can down the road” and has insisted the changes to the aid formula are needed as a result of declining enrollment. Her budget includes an $825 million increase in education funding, but, unlike in past years, not all school districts would see an increase. Hochul’s plan also includes $100 million to offset potential losses for high-need school districts, but that too has failed to gain traction with the Legislature. 

Lawmakers are still trying to hammer out a deal on housing after failing to come to an agreement on any meaningful policy in last year’s budget.  One major issue is a replacement for 421-a, an incentive for new, affordable housing, but the Real Estate Board of New York (REBNY) and the State’s construction unions have not yet been able to reach a deal on the program’s wage requirements.

REBNY Pitches 421a Final Offer

The Real Estate Board of New York said that it has made its final offer for a 421a replacement that increased wages and benefits for construction workers.

Progressive lawmakers are also calling for any housing package to include increased tenant protections, preferably the "Good Cause Eviction” bill. While Hochul has thrown cold water on the idea of enacting the bill as written, lawmakers are discussing a compromise on a version of the bill that introduces a higher rent cap and allows municipalities to opt out. Any deal on housing would include some measure of support for affordable housing owners who could put as many as 27,000 vacant units onto the market much faster than any new housing is built.  Assembly Speaker Carl Heastie indicated the two sides are at least moving in the right direction saying, “Sometimes in the budget, you might be in a different galaxy. I don’t know if we’re in the same country yet, but I think we’re on the same planet.”

The Executive Budget Proposal included scaling back Medicaid funding to the tune of $1.2 billion in response to looming multi-billion dollar gaps in the years ahead. To avoid those cuts while also addressing the fiscal cliff, the Legislature proposed a plan that would see New York apply for a federal waiver to tax Managed Care Organizations (MCOs, who would then be reimbursed by the federal government). The proposal, which would generate an estimated $4 billion a year, is only a temporary fix and would have to be reapproved after three years, potentially with a different administration in the White House who may not be inclined to subsidize New York’s Medicaid costs. 

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“Sometimes in the budget, you might be in a different galaxy. I don’t know if we’re in the same country yet, but I think we’re on the same planet.”

Assembly Speaker Carl Heastie

Hochul is also seeking to address the uptick in organized retail theft, proposing $45 million to create a Retail Theft Joint Operation, a tax credit for businesses to shore up security, and increasing the penalty for assaulting a retail worker. Leadership in both the Senate and Assembly have rejected the plan, with Speaker Heastie offering, "I just don't believe raising penalties is ever a deterrent. There’s already things in common law to deal with people who assault other people.” 

Some people believe there is a better way than New York’s opaque budget process:

Reinvent Albany on New York’s opaque budget process

However, THIS is the way.

The Executive Chamber and Legislature have until Thursday to iron out those issues and many more, but our guess is that—if there is progress in negotiations—one or two bills will pass next week along with another short-term funding bill, avoiding a temporary shutdown and providing cover for final negotiations.  If there is no progress on these major issues . . . then get ready for a much longer process.

Speaking of long processes, here’s a closer look at how long it takes to fix the Capitol stairs in Albany.  It is not a new story, but kudos to Hochul for pushing to get it done:

How Long Does New York Take to Fix a Staircase? 10 Years and Counting.

The 77 steps at the foot of the New York State Capitol have been cordoned off to the public for a decade, as the cost of much-needed repairs rises.

In Washington, D.C., Congress will be in session next week as lawmakers return from their two week Easter recess after successfully averting a government shutdown on March 22nd. With the funding problem behind them, and no real appetite for major legislation in an election year, much of the House’s focus will be on the $95 billion foreign aid package that passed the Senate in February. Under pressure from his right flank, Speaker Mike Johnson (R-La.) has refused to bring the bill to the Floor for a vote, but that could soon change. Speaking on the package, Johnson told reporters, “We’ll turn our attention to it and we won’t delay on that.”

The politics on the bill are thorny—some hardline conservatives oppose all foreign aid, especially to Ukraine, while some progressive Democrats have expressed concern with the military assistance for Israel contained in the bill. Rep. Marjorie Taylor Greene (R-Ga.), who filed a motion to remove Johnson as Speaker but has yet to force a vote on the issue, ominously warned Johnson saying, “He should not bring funding for Ukraine [to the Floor].” Republican Rep. Mike McFaul, Chair of the House Foreign Relations Committee, takes a different view offering, “I would like to be doing it as soon as possible. I think the situation in Ukraine is dire.” Should far-right Republicans move forward with the motion to vacate, Democrats and centrist Republicans could vote to save Johnson in exchange for a vote on the aid package. 

A special election for Alabama’s State House last week further underscored the GOP’s election struggles in the post-Roe era. Democrat Marilyn Lands defeated her Republican opponent in a deep red district by an astounding 25 points— even more impressive when you consider she lost in the same district in 2022 by 7 points. 

Her campaign focused almost solely on reproductive rights and access to I.V.F. after the Alabama Supreme Court ruled that frozen embryos were people with rights, sending the I.V.F. Industry into chaos in the State. Alabama’s Legislature also passed some of the most restrictive abortion laws in the country, providing no exception for rape or incest. In her victory speech, Lands said, “Today, Alabama women and families sent a clear message that will be heard in Montgomery and across the nation. Our legislature must repeal Alabama’s no-exceptions abortion ban, fully restore access to I.V.F. and protect the right to contraception.” The strategy certainly worked for Lands in Alabama, and national Democrats are hoping to keep reproductive rights act the top of mind for voters come November. 

Finally…

How were 19,000 Jaromir Jagr bobbleheads stolen and then returned to Pittsburgh?

It required police in Los Angeles, the FBI and Homeland Security to work together. 

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State Legislators Pledge Support for Empire AI at UB, NU Gets Federal Funding

State officials and members of Western New York’s Albany delegation are pledging their support for Governor Hochul’s Empire AI proposal with OD&A client, the University at Buffalo as its home base. [Read more.] Also, New York’s U.S. Senators announce federal funding for OD&A client, Niagara University’s STEM programs here.

Senator Schumer and Senator Gillibrand Secure $1.6M for Trillium Health's Clinic, Pharmacy, and Food Pantry

Jason Barnecut-Kearns, President and CEO of OD&A client, Trillium Health, said, "At Trillium Health, we believe that everyone should have access to high-quality, affordable healthcare – regardless of income, race, ethnicity, or any other factor.” [Read more.]

Jack is back with a double-header on the NYS budget process!

Listen for his take on Governor Hochul’s Executive Budget & the issues facing pushback from legislative leaders!

Which of these top budget items in Governor Hochul's spending proposal do you think the NYS Legislature should support?

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Results of the Last Poll

Do you think New York State will pass the budget by the April 1 deadline this year?

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