Updates: New York ‘Conceptually’ Has a Budget

Housing wasn’t the only area where suburbanites won big in this budget. Another major topic was protecting the financial future of public transportation: Seeking to prevent future budget gaps, lawmakers cobbled together an MTA funding package that includes over $1 billion in tax hikes on the largest employers in New York City.

Though the suburbs benefit extensively from the Metro-North and Long Island Railroad train systems, which the MTA operates, Hudson Valley and Long Island legislators pushed to exclude suburban businesses from the tax hikes — and won. Hochul’s initial payroll tax proposal would have cost those businesses about $200 million a year, according to a report from the Fiscal Policy Institute.

The suburban wins leave some legislators from New York City fuming over what they see as suburban ingratitude for major state investments. During this year’s budget process, Hochul opened the Grand Central Madison train terminal, completing a multi-decade, $11 billion project to bring Long Island Railroad trains directly to Grand Central Terminal. Last fall, Hochul opened the Long Island Railroad’s Third Track, an over $2 billion project to increase service and renovate several train stations. These projects will serve the same New Yorkers who most fervently opposed new housing near transit and dodged new taxes to support the MTA.

“We’ve spent tens of billions of dollars on infrastructure to bring better railroad access to Long Island. I do not know why we are not finding ways to build more housing on Long Island especially,” said Assemblymember Robert Carroll, who represents part of Brooklyn.

We’ll be updating this list as the remaining bills are voted on — and, of course, digging into them to bring you key updates on the final budget.

The state claims that the film tax credit pays for itself and creates tens of thousands of jobs. But those claims are based on deeply flawed assumptions, like that no filming at all would happen in New York without the tax credit, or that one person working on two movies counts as two jobs created. New York state has never shown that the film tax credit brings in more money than it costs, and a recent analysis put the program’s cost at over $65,000 per-full time job created.

Another half-billion dollars will finance the renovation of the Belmont horse racing track on Long Island. Horse racing attendance and revenue has been plunging for decades, despite massive state subsidies, suggesting that this year’s deal is likely throwing good money after bad.

Asked by New York Focus to justify the subsidy, Hochul cited an industry-commissioned study that found the renovation will create hundreds of jobs and bring a quarter-million new fans to the track each year. But the study didn’t include evidence for these claims, and the study’s author was unable to provide any when interviewed by New York Focus.

Though the half-billion in cash is technically a loan, the industry will pay the state back with public money that it gets from existing state subsidies — ensuring that those subsidies continue for the life of the loan and meaning that the public will ultimately shoulder the full cost.

Finally, a tax credit that refunds musical theater productions for part of their costs is also slated to be extended and expanded by $100 million a year. While it was launched in 2021 to help Broadway recover from the pandemic, it now looks set to become a permanent annual giveaway to the industry. The state hasn’t offered any evidence that the credit gives New York a positive return on its investment.

The budget also won’t include two attempts to get rid of existing subsidies. The Senate proposed eliminating a law that exempts Madison Square Garden from paying property tax, saving it over $40 million a year, and also proposed eliminating a subsidy for investments in low-income areas that also costs the state tens of millions a year. Neither proposal made the final budget.

The final budget did exclude two subsidies Hochul had backed, however: one to replace the controversial 421-a tax break for real estate developers, and another to subsidize businesses near public university campuses.

Nor will the budget deal plug NYCHA’s deeper financial hole: a repair backlog of more than $40 billion. A Senate source told New York Focus that the final budget would likely include $135 million in new “capital” funding for NYCHA, which pays for those major repairs — a sum one lawmaker called “shameful” in light of the total need.

Speaking to New York Focus before Hochul’s announcement, Lee declined to provide specific numbers but called the expected budget deal “positive” and said it reflected a “commitment to support public housing residents, subsidized housing residents, by the legislature and the governor.”

Lee noted the funding wasn’t just for NYCHA.

“Obviously, NYCHA is the largest public housing authority in the state,” Lee said, but there are close to 100 such authorities statewide, and they are “really struggling right now.”

The state launched ERAP in June 2021 to provide direct rental assistance to New Yorkers who had fallen behind on payments during the worst of the Covid-19 pandemic. It has so far disbursed nearly $3 billion, mostly federal funds.

Public housing residents and tenants who use Section 8 rental vouchers have seen none of that money: The ERAP law mandates that the office processing payments put applications from those groups at the back of the queue. As of April 10, less than 60 percent of the nearly 405,000 households that applied for ERAP had received the assistance.

Senator Julia Salazar said she was encouraged to see new rent relief for subsidized tenants in the budget, but was still waiting for final estimates of how much NYCHA tenants would actually receive. And she called the expected $135 million for repairs “insulting.”

The Senate had originally requested $350 million in capital funding for NYCHA, making it the only one of the three chambers to press for any new repair money at all.

“The city, state, and federal government continue to fail to directly invest in our public housing and take responsibility for the conditions in NYCHA developments,” Salazar said. “NYCHA residents who are my age have had a government slumlord their entire lives because no executive has had the political will to reinvest in public housing.”

This post has been updated to include comments from Sen. Brian Kavanagh.

Chris Gelardi contributed reporting.

“The major headline is that the goal of bail remains to be to ensure the person returns to court,” said Krystal Rodriguez, policy director of the Data Collaborative for Justice at John Jay College.

In fact, the “kind or degree” language is lifted directly from New York’s bail statute as it existed before the state’s contentious 2019 bail reforms. But, unlike the reforms’ other changes to bail law, this one was mostly semantic: Both pre-2019 and post-2019, judges have only been allowed to set bail or other pretrial conditions in order to ensure that defendants return for future court dates. No “dangerousness” — not now, not then. (Though whether judges actually follow the law is a different question.)

“The core of bail reform is still protected and we anticipate little change after the removal of the least restrictive language,” said Jaeok Kim, associate director for research at the Vera Institute’s Greater Justice New York program.

The changes may instead be geared toward scoring political points. Coming off of high-profile losses on court nominations and housing, Hochul wanted a win on bail — a topic on which she dug in her heels for weeks. The technical change lets her spin it as a victory — and at a moment when the national Democratic Party is pressuring her to look tougher on crime.

Hochul hinted that the bail changes were more about appearance than substance when answering a query from a New York Post reporter Thursday night: Referring to crimes committed by people released pretrial, she said, “there’s some horrific cases splashed on the front pages of newspapers.”

Some legislators still think that the proposal will result in expanded use of bail and pretrial jailing. The announced measure “would result in more Black, brown, and poor people being detained pretrial,” Assemblymember Latrice Walker, who had gone on hunger strike to protest Hochul’s proposed bail changes, said in a statement Thursday night. A spokesperson for Walker, one of the original sponsors of the 2019 reforms, did not respond to New York Focus’s questions before press time. Nor did Hochul’s office.

It’s entirely possible that judges use the change as a greenlight to surreptitiously consider dangerousness in bail considerations, of course. Many already do. And “kind and degree of control or restriction necessary” sounds less limiting than “least restrictive.”

But that’s yet to be seen. When it comes to the letter of the law, this agreement changes little.

“Maybe you confine these projects to a cap, how many megawatts they can actually produce. Or you say that they can only do projects, for example, in some disadvantaged communities where they’re saying low-cost power should be delivered,” Donohue suggested. He said these proposals had been “discussed at the table” but he did not know how seriously.

Anne Reynolds, executive director of the Alliance for Clean Energy NY, said she has sought language that would restrict NYPA’s ability to bid on contracts with the state energy authority NYSERDA.

“We don’t think it’s a level playing field to compete with a state agency to get a contract from another state agency,” Reynolds said.

Moreover, “NYSERDA has a certain amount of renewables that they’re setting out to buy,” she noted. “If NYPA wins a contract over a private developer, that doesn’t mean more renewables get built, it just means someone else is building them.”

Public power backers hope private developers’ concerns will be mollified by an additional provision they’ve recently brought into budget talks, which they say would expand NYPA’s role in connecting more renewables — private and public — to the grid. Transmission and interconnection have been major stumbling blocks for deploying renewables, and a big headache for the private developers who build them. But Carroll and Ziesche could not immediately provide details on the proposal, and Reynolds remains skeptical in the interim.

She did voice relief that a separate proposal to allow private utilities to build renewables — reportedly floated in budget talks — appears to have been withdrawn.

“We flipped out” when that was put on the table, Reynolds said. But that “fire drill” is over, for now.

Cuomo’s wage hike meant that in New York City, minimum wage workers got a two-thirds raise in less than three years. Under Hochul’s proposal, the city’s lowest-paid workers will see their paychecks grow by just a tenth in that same time span. For workers upstate, it’ll be about twelve percent.

New York lawmakers, meanwhile, increased their pay by 29 percent last December, making the legislature the highest paid in the country.

New York used to have the highest minimum wage, too; the 2016 legislation made it the national leader, along with California, which passed a $15 minimum wage law that year with a longer phase-in period.

“The message was this is no longer just a rallying point. This is no longer just something to do to win races or get headlines. This is real,” said Rich Azzopardi, who served as a senior advisor to Cuomo. “To have the biggest blue states in the nation do it at the same time, creating pressure on both coasts, I think was huge overall for the movement.”

Indeed, others followed New York’s lead — and leapfrogged it. Minimum wages above $15 are already in effect in California and Washington, as well as cities including Denver, Washington, DC, and — to the consternation of some progressive lawmakers — Flagstaff, Arizona. All of those states and cities have automatically increasing minimum wages that are projected to remain ahead of New York’s over the next several years.

One advocate who has followed the negotiations closely said that the latest proposal on cap and invest is close to Hochul’s original — establishing the program in law and allocating a portion of revenues for rebates to consumers, but leaving the policy details up to regulators.

The legislature would miss a big opportunity if cap and invest fell through in the budget, said Anne Reynolds, executive director of the Alliance for Clean Energy NY, who helped draft the cap-and-invest proposal as a member of the state’s Climate Action Council. “To the extent the legislature is interested in paying for the climate plan, this is the way to do it.”

But there hasn’t been a lot of good will to go around on cap and invest in recent weeks. Hochul’s sudden bid to overhaul how New York counts emissions “poisoned the issue for fruitful discussion in the budget,” Reynolds said.

Some advocates say the state still has time to make cap and invest work — and that it might actually be better to settle outside of the budget, which is largely negotiated behind closed doors.

A proposal as sweeping as cap and invest deserves its own set of public hearings, said Anthony Rogers-Wright, director of environmental justice at New York Lawyers for the Public Interest and a steering committee member of NY Renews. “Let’s make sure that it’s transparent, because the public absolutely has the right to weigh in, because this impacts their lives directly.”

But NY Renews as a whole is still determined to see cap and invest in this year’s budget, with all the provisions included in the Senate’s proposal.

Proponents worry that the push to put a price on carbon will lose steam if it’s not included in a final budget deal. But Reynolds said that might not stop the state from moving forward with the proposal. New York’s climate law gives the Department of Environmental Conservation broad latitude to impose emissions caps, she said, and Hochul’s administration will likely press on with the regulatory side of the program, whether the legislature embraces it or not.

“One would have thought the legislature would have liked to weigh in,” Reynolds said. “Why wouldn’t they want to take credit?”

Taking responsibility for such major legislation is a double-edged sword, though. If carbon pricing ends up increasing costs to consumers, as many fear, any credit for the program could quickly turn into blame.