Beginning of the End

Taxing State Budget Talks, Raising Hell Over Housing, Big Dem Ad Buys in NY

Author

Jack O’Donnell
April 15, 2024

Good morning and happy Tax Day direct from Albany where we maybe, kinda, sort of are getting close to a budget agreement.

On Friday and again last night, Governor Kathy Hochul, Senate Majority Leader Andrea Stewart Cousins, and Assembly Speaker Carl Heastie met for a few hours and came to some broad agreements or at least conceptual frameworks.  The Legislature conferenced in their respective Houses on Friday night, hearing details of a potential housing deal as well as other broad agreements. 

Albany nears a housing deal that tenant and landlord groups both hate.

There is still plenty to work out so expect a further extender today and hope for a “handshake” agreement later this week while the final details are worked out.

 What we know so far:

  • The final price tag will come in at $235 billion—$2 billion more than what Hochul proposed in her Executive Budget, but roughly $10 billion less than what the Legislature proposed. That top line spending number means that the tax hikes included in the Senate and Assembly budgets will be rejected in the final agreement. 

  • A deal on a comprehensive housing package is reportedly within reach and will LIKELY include increased tenant protections while also incentivizing new housing construction. The deal would codify aspects of the “Good Cause” Eviction bill that many housing advocates and progressive lawmakers have been pushing for, but with some notable carve-outs: landlords with 10 units or less would be exempt while newly constructed units would have a 30-year exemption from the new rules. The law would also only apply to municipalities that op-in. The deal also addresses individual apartment improvements (IAI) for rent stabilized units, upping the cap on the amount landlords can recoup following renovations.

  • The IAI proposal includes tiers, with the lowest tier applying to any apartment and will permit landlords to recoup up to $30,000 by raising the monthly rent by up to $167. Tiers II and III would allow landlords to recoup up to $50,000, but only if the unit was recently vacated or vacated by a tenant who lived there for at least 25 years. The IAI changes have advocates up in arms (a rally is planned today), but are not enough to actually support affordable building owners and fall short of what is needed to get these units renovated and back on the market.  The housing piece will also include 485-x with labor protections, a replacement for the 421-a affordable housing tax incentive that developers had been seeking.

  • On public safety, the three sides agreed to a set of policies aimed at cracking down on organized retail theft. This will include more money for the State Police to proactively target criminals, increasing the penalty for assaulting a retail worker through aggregating, and a tax break for businesses to boost store security. The budget will also expand the number of violent crimes that are eligible to be charged as hate crimes, including first-degree rape and gang-assault. 

NYS Senate votes to extend budget to April 15

WATCH: Jack’s budget update on News 4 Buffalo.

  • As much as $2.4 billion will be allocated to address the ongoing migrant crisis, a $500 million increase over the last year. New York has had 180,000 new arrivals over the last two years and the funding will be used for housing, job placement and training services, and administrative costs. 

  • Lawmakers are also expected to include changes meant to help New York’s fledgling legal cannabis industry. The potency tax, which fluctuates based on THC concentration, will be replaced with a flat excise tax. The budget will also give the State expanded authority to shutter illegal cannabis shops and provide municipalities with the authority to do the same. 

  • The budget will enact changes to the Tier 6 pension program, basing a person’s final average salary calculation on the last three years of employment, opposed to the current five year calculation.

As we highlighted last week, Governor Hochul backed off of her push to eliminate the “hold harmless” policy that ensures no school district receives less foundation aid than the previous year. A compromise that changes the inflationary factor that governs foundation aid to school districts is in the works. The current factor, a 3.4 percent increase every year, would be reduced to 2.8 percent in the final budget. Both the Governor and Legislature are on board with expanding the Tuition Assistance Program (TAP) for college students, but are still working out the budget impact. 

Not everyone is thrilled with the potential agreement, especially on housing. Housing Justice For All, an influential tenant advocacy coalition, has called on lawmakers to walk away from the deal.

The group’s Executive Director, Cea Weaver said, "Not only are unregulated renters getting virtually nothing out of this version of good cause, rent stabilized tenants are actually losing rights, and that sort of work of pitting one set of tenant interests' against another is not acceptable to us… What's on the table right now, we really think it's just a deal not worth doing when it comes to tenants. If that is what Gov. Hochul is willing to give, we think that the State Legislature should walk away and should say 'No' and maybe do something during the session.” 

Senate Housing Chair Brian Kavanagh did not go as far as to say he would oppose the budget over the housing deal, but offered, “We're resisting anything that trades the basic rights of one group of millions of New Yorkers for another group of millions of New Yorkers. There's no reason to undermine what we have in order to get protections for a different set of people.” Kavanagh was responsible for many of the 2019 rent regulations laws and is hesitant with any changes. 

Still, the devil is in the details and no one has seen the details. 

On the other hand, we are beginning to see some of the details of how the political map will play out in New York this year. The State has five competitive Congressional seats currently held by Republicans, including two on Long Island, two in the Hudson Valley, and one in the Syracuse region. House Democrats see New York as a key part of their path back to a majority and the House PAC recently announced $21 million in ad buys ahead of November. The majority of the money, $16.1 million, will be spent in the New York City and Long Island TV market, but the group is also spending $1.19 million in Albany, $880,000 in Binghamton, $2.78 million in Syracuse, and $376,000 in Utica. Democrats successfully flipped a seat on Long Island earlier this year with Tom Souzzi defeating Republican Maxi Philip in a special election in NY-03 after former Rep. George Santos’ expulsion. 

Dem PAC reserves $21M in ads across N.Y. in bid to win back control of House.

November is coming into more focus across the country as well.  A Republican candidate for Montana’s Senate seat, Tim Sheehy, is having a George Santos moment of his own after some inconsistencies in his explanation for how he received a past gunshot wound. Kari Lake, the Republican running for Senate in Arizona, has had her shifting stance on abortion come under fire after the state’s Supreme Court reinstated an 1864 law that outlaws nearly all abortions. 

In Washington, D.C., hardline members of the GOP failed to kill a renewal of the Foreign Intelligence Surveillance Act (FISA) last week, and vowed retaliation for fellow Republicans who voted for renewal. FISA allows the government to monitor the communications of citizens suspected of wrongdoing living abroad without a warrant, but their communications with domestic citizens are often swept up as part of that surveillance.

House passes modified surveillance bill after it failed earlier this week.

Conservative Republicans and privacy hawks have argued the warrantless spying is unconstitutional, and pushed for an amendment that would have required intelligence agencies to first obtain a warrant before beginning a surveillance. Rep. Matt Gaetz (R-Fl.), a leading FISA critic said, “Every one of these members who voted against a warrant requirement, they are the deciding vote. They own it. And some of them may see me showing up in their districts very soon to campaign against them and to stand for the Constitution.” 

Speaker Mike Johnson himself was once skeptical of FISA back when he was a rank and file member of the Judiciary Committee, but has since changed his stance. Johnson told reporters, “When I was a member of Judiciary, I saw all of the abuses of the FBI — there were terrible abuses, over and over and over. And then when I became Speaker, I … got the confidential briefing from sort of the other perspective on that, to understand the necessity of Section 702 of FISA and how important it is for national security.” While the anger with Johnson is widespread among the House Republican conference, there is still little appetite to move forward with a motion to remove him. 

Rep. Tom Cole (R-Okla.) has been named the new Chair of the House Appropriation Committee following Rep. Kay Granger’s announcement that she will be stepping down. The Committee is one of the most powerful in the House, with almost all government spending bills originating there. Cole was the Chair of the House Rules Committee which is now vacant and Johnson could use the Chairmanship to buy back some goodwill with far-right Republicans after the FISA vote. 

Johnson is also set to move forward with a foreign aid package for Ukraine, Israel, and allies in the Indo-Pacific, adding to the tension with far-right members who have vowed to oppose any additional funding for Ukraine. Rep. Marjorie Taylor Greene has threatening to move on her motion to remove Johnson if he moves forward with the aid package, however, Johnson received some cover this weekend at a press conference with former President Trump at Mar-a-Lago. 

Trump offered, “I think he’s doing a very good job. He’s doing about as good as you’re going to do” and later added, “I stand with the Speaker, we’ve had a very good relationship.” 

 

In sad news, Americans, and really the entire world lost a controversial sports hero this week… Akebono Taro, the first foreign born Sumo Grand Champion.

The Associated Press – Sports

The best news of the week?  More Bluey!

Happy Birthday Thomas!

Finally, if you happen to see this handsome young man this week, please wish him happy birthday and hand him Legos. 

He turns nine on Wednesday. 

I could not be more proud.

Megaphone icon

Client News

New Health Care Facilities Coming to Buffalo's East Side

OD&A client, Endeavor Health Services has secured funds to build a new 15,000-square-foot facility at 1420 Broadway. This will be a significant upgrade from its current location at 1131 Broadway, allowing the agency to better support the community. [Read more.]

Bill that would give national recognition to OD&A client, Strong Museum passes the House.

OD&A client Buffalo Zoo is proud to announce its new Zoo for All program, a bold initiative offering significantly reduced admission rates for low-income families. More information on how to take advantage of this program here.

Listen to our podcast on your favorite platform!

As NY Budget talks drag on, do you care that the final deal is now two weeks late and counting?

Login or Subscribe to participate in polls.

Results of the Last Poll

If you are on the path of totality, will you be watching today's solar eclipse as it's happening?

Megaphone icon

O’Donnell & Associates Senior Advisor Kara Hughes Named ‘Who’s Who in Government Relations’

The 2024 List from City & State NY Highlights Key People Shaping NY Policy

Government relations firm, O’Donnell & Associates announces that Kara Hughes, Senior Advisor in NYC for OD&A, has been named ‘Who’s Who in Government Relations’ for the second year in a row by City & State New York, a prominent trade publication covering politics and policy in the Empire State.

The 2024 list recognizes the key people shaping policies that affect New Yorkers in so many ways – from the expansion of health care coverage to the creation of more affordable housing. Hughes also made the list in 2023.

“Thank you, City & State NY for including me once again on your Who’s Who in Government Relations list,” says Hughes. “I am thrilled to be included with so many wonderful friends and colleagues!”

One of Hughes’ proudest accomplishments is her successful strategy, working in partnership with New York City, to establish its first ever policy for the use of drones. With OD&A client Pixis, a leading global light show company, Hughes worked with the Adams administration on a one-of-a-kind public-private collaboration for the first drone shows in New York City. Pixis designed and executed bespoke stories in the sky to celebrate the 50th anniversary of hip-hop.

“Kara makes things happen,” says Managing Partner Jack O’Donnell. “It’s such a privilege to learn from her, work with her, and solve problems together.”

Hughes has more than two decades’ experience in public policy and government relations at the federal, state, and local level. She specializes in helping corporations and advocacy groups translate broad policy goals into real world action.

Her government experience includes working as Acting Director of City Legislative Affairs for the Mayor, Senior Adviser for City, State, and Labor Affairs at the Port Authority of New York and New Jersey, and Director of Economic Development for then-U.S. Sen. Hillary Rodham Clinton.

This Day in History

April 15, 1912: British luxury passenger liner Titanic sank en route to New York City from Southampton, Hampshire, England, after striking an iceberg during its maiden voyage; some 1,500 people died.

News

Worth a Read