Manic March

Good morning from Pindar’s Corner, Delaware County. Today is the birthday of Daniel Patrick Moynihan. 

In Albany, budget season is in earnest after the Senate and Assembly passed their respective One-House budget resolutions last week, staking out their positions as they enter negotiations with the Executive Chamber. Today, the “Mothership” will meet. That is the General Budget Conference Committee, where lawmakers will give their statutorily required update on the status of the final budget.

The OD&A team, led by Chief of Staff Diane Ong and VP & Policy Director Jim Moore, has prepared One-House budget summaries for both the Assembly and Senate, available here.

A couple of key areas of contention:

Climate

Governor Kathy Hochul and the Legislature remain at odds over the fate of the state’s 2019 landmark climate law, which mandates aggressive emission-reduction targets. Hochul continues to raise the specter of skyrocketing costs of compliance with that law and is expected to use the budget to codify rollbacks and delays in the law. Speaking to reporters last week, Hochul offered, “It was a world that had not seen a global pandemic that disrupted supply chains… followed by some of the highest inflation we've seen in years, racking up the costs once again. And then let's throw on a hostile, very hostile, administration in Washington that basically eliminates the tax incentives that businesses count on when they're going to make investments in renewable energy.” Hochul has not offered a concrete proposal or specifics; nonetheless, many in the legislature are already skeptical.

Senator Pete Harckham, Chair of the Senate Environmental Conservation Committee, objected, “It was a painstaking process. It was a very public process, and then for us to attempt to change that in the secrecy of the budget process does not do justice to the law.” Republicans in the legislature have lauded Hochul’s desire to pause implementation of some of the more onerous components of the climate law, with Assembly Minority Leader Ed Ra offering, “The conversations come on the table about making some changes to our energy policy. That's something that we fully agree with.” 

Taxes

Both the Senate and Assembly proposed tax increases on wealthy New Yorkers and corporations, while Hochul remains steadfast in her position that tax increases are unnecessary and harmful, especially in New York City, where she believes local lawmakers can do more to close the city’s $5.4 billion budget gap. Hochul insisted, “Now it's up to the City Council, and I've had conversations with Council members. They're doing their job too, looking at: Is the budget portrayed the way it needs to be? Are there areas of savings? Are there areas where we can be making adjustments? And so, I'm going to let them do their work.” The Senate proposal includes a 0.5-point increase for individuals earning above $5 million and a 1.75-point increase for corporations earning at least $5 million, while the Assembly proposed a 0.2-point increase for individuals above $5 million and a 2-point increase for corporations with at least $10 million in income. The tax increase is a major priority for New York City Mayor Zohran Mamdani, who is looking for revenue to pay for many of his lofty campaign promises, including universal free buses. Senate Transportation Chair Jeremy Cooney tempered down expectations on free buses last week, telling reporters, “On our way, but not universally.”

To combat what many lawmakers see as federal overreach in immigration enforcement, the Senate and Assembly proposed increasing funding for the state Office of New Americans to $183 million—significantly higher than the $72.4 million included in the Executive Budget. Hochul’s budget includes legislation that affirms the right of sensitive locations, such as churches, hospitals, and schools, to restrict entry to federal immigration authorities without a judicial warrant and provides a pathway for New Yorkers to sue federal officers for alleged violations of their civil rights. Neither House included these proposals; they are pushing for more comprehensive legislation to codify immigrant protections. Senate Majority Leader Andrea Stewart-Cousins is looking to get “as close as possible” to the New York for All Act, legislation that prohibits formal or informal cooperation between local law enforcement and federal immigration authorities. Hochul has not yet gotten on board with New York for All, instead proposing the “Local Cops, Local Crimes Act,” which bans formal cooperation contracts between New York law enforcement and federal agencies. Three-way negotiations are ongoing on this, with the hope of including it in a final budget agreement.

More broadly, Hochul and the Legislature are hoping for an on-time (or at least timely) budget, although the fight over tax increases could prove especially sticky. 

In political news, Georgia held a Special Election last week to replace former Congresswoman Marjorie Taylor Greene in the state’s 14th Congressional District. Democrat Shawn Harris, a retired Army Brigadier General, ran against former District Attorney Clay Fuller, who has President Donald Trump’s endorsement, along with a plethora of other candidates, with neither leading candidate getting the 50% vote share needed to avoid a runoff in the splintered primary field. While Fuller will be heavily favored in the head-to-head runoff, the seat will remain unfilled for another month as House Republicans navigate a historically low margin. 

In Mississippi, in a closely watched primary race, Representative Bennie Thompson, the longest-serving Black Democrat in the state's congressional delegation, won his primary for the Second Congressional District amid calls from Democrats across the country for older lawmakers to step aside for a younger generation. Thompson was first elected in 1993. He is one of several Democrats who faced a primary challenge this year from a younger member of his party eager to capitalize on broader frustrations with aging leadership in Washington. Evan Turnage, a lawyer who recently returned to his home state after working as legal counsel for Senator Chuck Schumer of New York, offered a vigorous challenge, but Thompson’s record of steering millions of dollars back home and spending time in the district was enough to keep voters on his side. He remains the top Democrat on the House Homeland Security committee, putting him in line to reclaim the gavel should his party take back the chamber.

 -Jack O’Donnell

OD&A was proud to join our client, M&T Bank, for the grand opening of its new full-service branch at 2976 Third Avenue in the Mott Haven neighborhood of The Bronx. The new branch is another step in M&T Bank’s continued investment in New York City, expanding access to banking services for local residents, families, and small businesses.

We were honored to hear remarks from Congressman Ritchie Torres and celebrate alongside NYC President Blair Ridder, Senior Branch Manager Marlon Barrett, and representatives from the offices of Governor Kathy Hochul, Senator Chuck Schumer, Assemblymember Chantel Jackson, State Senator Luis R. Sepúlveda, Speaker Carl Heastie, and Council Member Justin Sanchez.

A great day for the community and for the future of banking in the Bronx!