Path Clearing

Good morning from Albany, New York and May the Force Be With You!

New York’s budget is over a month late and counting. Legislators will pass a ninth extender later today. There is some hope that it may be the last. Reading the tea leaves at the Capitol suggests some progress on outstanding policy issues. For instance, Assembly Speaker Carl Heastie indicated the leaders have discussed the actual fiscal details of the budget (a sure sign of progress) while Senate Majority Leader Andrea Stewart-Cousins offered that the budget process is “approaching the end of the middle.” 

Along those lines, Governor Kathy Hochul stopped into the LCA late last week for a brief gaggle (another sure sign the end is at least within sight). One highlight was Hochul saying this could be the week… at least for a handshake deal (the practicalities of passing the budget would still involve additional days of debate and votes). Hochul also said that rebate checks for utility ratepayers remain on the table, as does more education aid for NYC, and, in response to a question about free buses for NYC, that "municipalities that want to pay for free buses certainly are at liberty to do so."

In justifying her optimism, Hochul emphasized that “our teams are going to continue working day and night for the entire weekend.” Conversations the OD&A team had over the past 72 hours confirm that legislative, budget, and senior staff were working hard all weekend.

In less optimistic notes, Hochul confirmed that sticky wickets remained, including details of her proposed pied-à-terre tax for high-value non-residential homes in New York City, but said her budget folks were working with NYC to determine a valuation method.

Hochul made some exciting news, dropping, “We had a very productive meeting today to launch our exploratory committee for the Olympics” before refusing to answer any questions or provide additional information. The effort for a Lake Placid-New York City Winter Olympics bid has been championed by Assemblymember Bobby Carroll, who has done an excellent job developing and promoting his brainchild. The idea is one OD&A fully endorses. Let’s go! 

Last week, we discussed auto insurance in detail, and there were further staff discussions between the Houses and the Executive this weekend.

On immigration, Hochul and lawmakers appear to have a deal within reach that will include sanctuary protections preventing local law enforcement from coordinating with federal immigration authorities unless there is probable cause that an individual committed a crime. The agreement will also add new sensitive locations where immigration authorities are barred from conducting enforcement operations, including public spaces, and even permit private businesses to refuse entry to federal agents. Hochul has resisted calls from the Legislature to adopt New York for All, but has gone further than her original immigration proposal, which included a ban on “287-g” agreements with ICE to deputize officers and restricted sensitive locations to schools, hospitals, and churches. A spokesperson for Hochul said last week, “Gov. Hochul is committed to keeping New York communities safe, which is why she has proposed a common-sense set of policies to hold ICE accountable while protecting the constitutional rights of every New Yorker. The governor remains focused on working with the Legislature to keep federal overreach out of New York, and any changes to the proposal have come as a direct result of requests from the Legislature.” Let’s call this close.

Hochul is also dealing with her push to roll back provisions in the state’s Climate Leadership and Community Protection Act (CLCPA). In her latest proposal to lawmakers, New York would set a 2028 deadline to submit regulations for a nascent cap-and-invest program rather than the originally proposed 2030 deadline. The offer also includes a non-binding 2040 target for a 60% reduction in emissions, keeps the original 2050 deadline for 85% reductions, and would change the accounting methodology to bring New York in line with other states. Senate Leader Andrea Stewart-Cousins is heralding the latest offer as a win for her conference, telling reporters, “We were never comfortable with the governor’s proposal for 2030. We’ve been pushing and pushing to get the date up. Getting it to 2029 took quite a lot. So the governor is now saying 2028, so it is certainly better than it was. I think it’s taken a long time with a lot, a lot of effort to get this movement, and I think the movement is in the right direction.” Hochul has insisted the push for these changes is about protecting New Yorkers from skyrocketing utility costs rather than a desire to water down climate protections, declaring, “We were sued, we were the defendants in this case, and a judge ruled against us, and that’s why I’m using this time to work with the Legislature to give a longer runway, further out, based in the reality of today that cost pressures have to be factored into this. We cannot ignore the fact that there are businesses and families who will be hurt if we don’t have a different timetable and also a different calculation.” Let’s call this, also, close.

There was also back and forth on taxes this week with Progressives, especially in New York City, including Mayor Zohran Mamdani, continuing their efforts to pressure Hochul into further tax increases to address New York City’s budget gap. Mamdani, this time with the support of City Council Speaker Julie Menin, floated changes to the Pass Through Entity Tax (PTET), a workaround of the cap on state and local tax (SALT) deductions that allows business owners to pay individual state taxes through a business-level tax. Paying individual taxes at the business level allows owners to deduct state taxes as a business expense, thus deducting their federal taxable income. Under the Mamdani/Menin proposal, PTET would be cut from a 100% rebate to a 75% rebate, which the duo argues would generate roughly $1 billion in additional revenue for NYC. Hochul, unamused by the laundry list of tax hike options coming from her fellow Democrats, dismissed the proposal, saying simply, “It’s not happening. We’re not changing PTET.” The PTET plan comes amid the backdrop of a report from New York City Comptroller Mark Levine that cast doubt on Hochul’s projection that her pied-à-terre tax will generate $500 million in revenue for New York City. The report reads in part, “We find that, before adjusting for these factors, our choice of tax rates and brackets could raise almost exactly $500 million from a little over 11,200 properties. However, revenues could be reduced to between roughly $340 million and $380 million based on assumptions on exclusions for rented units and behavioral changes following the imposition of the tax." Combined with Heastie telling New York City lawmakers to agree on the size of their deficit and take a look at their own spending, we are considering this an issue with still more work to be done.

Hochul also offered a bit of a look behind the curtain with her thoughts on late budgets. Speaking to reporters last week, flanked by a poster board that read “good things happen in April,” Hochul touted a list of policy accomplishments that she has been able to secure in budget overtime during her tenure as governor. Hochul mused, “Everything I’ve stood for and fought for is for the betterment of the people of this state. The necessary bail changes, which took two late budgets to get through, the necessary discovery changes, the involuntary confinement to help people who are living off the streets without proper care, cellphones, the cellphone ban, which has been extraordinary. I’d prefer to be done on time. My hands are ready to shake, but we’ve just got to work through some more details because my priorities are very important to me.” The comments come after Heastie's pointed criticism of the budget process. Although making clear that he was upset with the way the game is rigged, not the players themselves, Heastie directed much of his ire at the press for not covering the structural inequities in the budget process. Earlier in April, Heastie declared, "There is something wrong with this process, and you all don’t write about it. You all write about it happening; I don’t think you write about what it really means. A governor’s budget quite possibly takes up 80% of a session, but in a few days, we’re going to be in May. I have to try to pass all of the priority bills the members want in a month.”

In political news, Mamdani’s political aura took a hit this week after his endorsed candidate, Lindsey Boylan, lost her race to replace now state Senator Erik Bottcher on the New York City Council.

Bottcher’s former Chief of Staff, Carl Wilson, was declared the winner with roughly 43% of first-choice votes in New York City’s ranked choice voting system. Wilson was endorsed by Council Speaker Julie Menin, giving her another victory in the political proxy war with Mamdani that has unfolded since he took office. 

The Supreme Court threw fuel onto the gerrymandering flames with a landmark ruling demolishing a key provision of the Voting Rights Act. In a 6-3 ruling, the Court threw out decades of precedent around Section 2 of the VRA, a provision that outlawed discrimination in elections on the basis of race that has been interpreted to allow the use of racial demographics in redistricting to protect the voting power of minority groups. The challenge arose from Louisiana’s new Congressional map that created a second majority-minority district. In his opinion for the Court, Justice Samuel Alito argued that Louisiana did not have an interest compelling enough to justify race-based redistricting, writing, “the Constitution almost never permits the Federal Government or a State to discriminate on the basis of race.”

The decision could have devastating consequences for Democrats in the deep south and many Republicans, including House Speaker Mike Johnson, are calling on decision makers in states including Tennessee, South Carolina, Louisiana, Florida, and Mississippi to press the advantage. Some states have already held primaries while others, including Louisiana’s are now on hold.

In response, House Minority Leader Hakeem Jeffries vowed to meet Republicans in the political gutter, promising further retaliatory redistricting in solid blue states. Speaking to reporters, Jeffries said, “All options are on the table as we get through the 2026 election and look to the future. As many governors have already indicated, we will be prepared to respond in states like New York, Illinois, and Maryland, as well as in Colorado, in advance of the 2028 election.”

Hochul was equally combative, positing on social media, “The Supreme Court has been chipping away at our elections for years. It is clearly carrying out Donald Trump’s will with this decision. New York has always led the fight for voting rights, and we’ll lead again. I’m working with the Legislature to change New York’s redistricting process so we can fight back against Washington’s attempts to rig our democracy.” Stewart-Cousins echoed those remarks at the Democratic Rural Caucus event this weekend. This has been a messy process and one that is sure to further turn off many voters, but with this decision, the process is far from over. Stay tuned, as this will not be the last you hear about redistricting ahead of November’s midterms and the 2028 presidential election. 

While American/Canadian relations may be temporarily frayed, the City of Good Neighbors is extending that courtesy to our friends to the North. It was really cool to be a part of it.

 -Jack O’Donnell

Watch a report on the Cook Properties Open House from Channel 10 News in Rochester here.