Progressives Slam State Senate Finance Secretary Pick

Published in partnership with City & State.

A new pick for state Senate Finance Committee secretary, a top Democratic staff position in state budget negotiations, has raised eyebrows among progressives concerned that the conference has poached David Friedfel, the top state policy analyst of the Citizens Budget Commission, an independent research organization that advocates conservative fiscal policy.

Friedfel will play a lead role in negotiations between the Senate, Assembly and governor’s Division of Budget, as well as in internal discussions among senators, according to longtime Albany observers. Friedfel’s appointment comes as progressives push for a spate of tax-the-rich proposals to meet a projected $63 billion four-year deficit, while centrists, including Gov. Andrew Cuomo, argue that the wealthy might flee the state if their already large tax burden increases. 

Before joining the CBC in 2016 as director of state studies, Friedfel held a number of positions in government – budget examiner for the state Division of the Budget, staffer for the Assembly’s Ways and Means Committee, and budget commissioner of Albany County – that even critics of his appointment say qualify him for the role.

But over the past five years, Friedfel has led the CBC’s opposition to several progressive proposals to raise revenue and promote economic equality. Advocates of hiking taxes on the rich say Friedfel is a surprising pick for a conference that has moved left in recent years. State Senate Majority Leader Andrea Stewart-Cousins has publicly supported increasing taxes on the richest New Yorkers.

Earlier this month, a large coalition of progressive advocates and legislators unveiled a proposed package of six revenue-raising proposals, including taxes on capital gains, Wall Street financial transactions and large inheritances. The coalition estimates that the collective package would generate over $50 billion in new annual revenue, enough both to cover projected deficits and to expand public services.

These are the same kinds of proposals that Friedfel might have opposed at CBC. "It's ridiculous! I absolutely think it sends the wrong signal that we have someone who publicly had expressed very conservative financial views,” Queens Assembly Member Ron Kim told New York Focus and City & State of Friedfel’s appointment. “At this time, when we're about to take on a massive progressive tax policy package, I don't know why they'd empower someone like that. So I'm very alarmed by his employment, and I'm hoping the Senate will reconsider.”

Some left-wing activists also fiercely criticized the selection. “David Friedfel has a known history of cautioning against vital tax increases to the wealthy, corporations, and the financial industry,” said Sumanthy Kumar, co-chair of NYC Democratic Socialists of America. “In this current economic environment, appointing a fiscal conservative to this powerful Senate Finance position shows just how out of touch our Senate leaders are with the people of New York state.”

But influential business groups welcomed the pick. “I think it’s a terrific staff appointment by the Senate,” said Kathryn Wylde, president of the Partnership for New York City, a nonprofit business advocacy organization, in a phone interview last Friday. “I had the opportunity to speak with David this week, on some of the key issues coming up, and he is thoughtful, a strong research and data-oriented person.”

Billing itself as a nonpartisan fiscal watchdog, the CBC supports some good-government reforms that progressives favor. Friedfel has denounced what he describes as a lack of transparency in the state Budget Division, calling deferral of Medicaid payments last year “one part fiscal gimmick and one part punt,” and has advocated freezing business subsidies until oversight and transparency reforms are passed.

But on bread and butter fiscal issues, the CBC is a prominent voice cautioning against increasing taxes on top earners and for cutting some social programs. Its Board of Trustees is stacked with corporate executives from firms like Google, Consolidated Edison and Bank of America, as well as business lobbyists and high-net-worth members of New York’s power elite.

As CBC’s top budget expert, Friedfel has produced a drumbeat of reports on the risk of millionaire tax flight from New York City, and is frequently quoted arguing that the wealthy “may choose to leave New York and take all their income with them” if subjected to higher taxes. 

In the report he co-authored in May on the state’s budget shortfall, Friedfel recommended only two tax policy changes: to freeze planned middle-class tax cuts and to suspend the state’s sales tax exemption on clothing costing less than $110. “The clothing exemption provides some benefits to low-income households, but a temporary suspension would be widely shared and help the State avoid cutting needed services,” Friedfel wrote.

Friedfel long argued that the state has “a spending problem” and that therefore it should make targeted cuts to expensive programs like Medicaid. He has also said New York could spend less on education if it reworked its byzantine Foundation Aid spending formula and high personnel costs. “We also have very powerful unions and we spend a lot on teacher salaries and fringe benefits,” he told City & State in 2016.

Jose Gonzales, Director of Data Initiatives at progressive organizing group New York Communities for Change, said he found out about the appointment “right away,” in a group chat of progressives tracking developments on the upcoming budget negotiations. “The general mood was concern, and for some of us – for me – despair, because it seems like another obstacle. It’s already so hard to get over this gospel that’s been drummed into people about the word ‘taxes,’” Gonzales said. “It seems fairly obvious to me that he’s not going to be an ally.”

Even among state Senate Democrats there is some dissent. “I'm stunned and I know other legislators are totally stunned,” one progressive senator from New York City, who asked not to be identified in order to maintain leverage in budget discussions, said about Friedfel’s appointment. “An Assembly member just called and said, ‘you realize how bad this is?’ And we’re like, yeah, we do.”

But Assembly Member Phil Steck (D-Schenectady) – a longtime sponsor of reinstating the stock transfer tax, which Friedfel opposes – played down the political significance of the Senate’s pick for top budget negotiator, arguing that Friedfel does not represent an ideological shift but merely a choice with technical expertise. “It would surprise me if the New York state Senate, with all the progressive senators that they have, would be hiring this person for the purpose of advancing the right-wing agenda of the Citizens Budget Commission,” Steck said.

Mike Murphy, communications director of the Senate Democratic conference, said in a statement, “We are a member-driven conference. We have been and always will be progressive driving force in this state. David is a professional with a wide array of experience in the budget process at every level and we welcome him to our team.”

Even his critics agreed that Friedfel is an experienced and capable budget wonk. "He has legitimate finance, fiscal and tax experience. He's among a large handful of people qualified to do the work - not a tiny group but not a huge one either," said Michael Kink, a former chief policy advisor to the Senate Democratic conference and the executive director of the labor-backed Strong Economy for All Coalition, an umbrella group favoring tax increases.

“But my concern is that he’s sold his services and expertise to Wall Street banks and ultra-rich New Yorkers for the last few years,” Kink continued. “The Citizens Budget Commission was representing 10% of the people against 90% of the people when they said, ‘don’t tax the rich, cut the schools.’

Bruce Gyory, a Democratic political consultant, argued that progressives’ worries about the appointment are misplaced. Friedfel will be tasked with implementing policy set by leadership and the conference – not setting it himself, Gyory said. “I have never known a Finance secretary who has tried to be an independent actor. Any who tried quickly had their wings clipped or were relieved.”

Some progressive advocates said they weren’t too concerned either. “He’ll make his recommendations to (Senate Finance Committee Chair Liz) Krueger and Stewart-Cousins, but ultimately it’s the Senate’s Democratic conference that makes the decision on the budget – not the staff,” said Blair Horner, legislative director of the New York Public Interest Group.

Others agreed that the final responsibility lies with the legislators and their leadership, but argued that top staffers are still influential. “Ultimately, he is a functionary,” said Cea Weaver, coordinator of the Housing Justice for All coalition. “But it’s also true that the conference relies on advice and support from policy experts. It’s certainly a position where he will have a lot of influence on what the Senate thinks will or won’t work, when it comes to revenue options.”

Staffers are especially influential on lower-profile and technical policy decisions, said Boris Santos, an organizer with NYC-DSA and the former chief of staff for state Sen. Julia Salazar. “The policy area of tax, in particular, is riddled with details, many of which ultimately escape political and legislative scrutiny. The person appointed to this role will have a large degree of discretion to make policy decisions of large consequence behind closed doors,” Santos said.

Kink said Friedfel’s appointment may indicate an attempt to bring special interests and fiscal centrists on board with a moderate revenue package, rather than fighting against them for a larger package. “There’s just a big difference between what we actually need to help all New Yorkers make it through this and what a few rich people are willing to toss at you,” Kink said. “That is a wide gulf, and that’s still the job of the Legislature to push Cuomo to do what’s actually needed, as opposed to what’s just marginally doable.”

Neither Friedfel nor the Citizens Budget Commission could be reached for comment before publication of this story. A number of state senators from across the ideological spectrum within the party, including many who sit on the Budget Committee, also declined to comment or did not respond to inquiries.

For many progressives, the appointment underscored the need to maintain pressure on the Legislature. “The Senate has demonstrated itself to be a more progressive body, and certainly more open to democratic debate,” Weaver said. “So (Friedfel’s appointment) is not the end of the world by any means – but it means we have to work twice as hard to bring in expert voices who will be able to convincingly say the world’s not going to fall apart if you tax millionaires and billionaires.”