State Budget

Who Blinks First?

Today is March 4. Gov. Andrew Cuomo released his 30-day budget amendments, which jammed the Legislature by stuffing ever more policy (particularly ethics reforms) into appropriations bills, on Feb. 21 – almost two weeks ago.

So far, neither the Senate nor the Assembly has introduced Cuomo’s amendments – a move required before they can be formally considered by state lawmakers.

As Newsday’s Mike Gormley reported, the Assembly issued a statement Sunday night pledging to get the introduction process started, but gave no timeline for doing so. And, as of last night, the chamber still had yet to take action.

In a statement given to Gormley over the weekend and re-issued to me last night, Mike Whyland, spokesman for Assembly Speaker Carl Heastie, said the amendments would “of course” be printed “because the Constitution requires us to act on them as submitted.”

“We are reviewing them with members,” Whyland continued, “and we continue to negotiate in good faith on all of the issues – including the ethics reform package. We will be meeting with the governor to further discuss the budget this week.”

Sources familiar with the Senate Republicans’ thinking say they are holding back on introductions because they’re reviewing “all options” in response to the governor’s hardball budget tactics – including a possible lawsuit revisiting the landmark 2004 Court of Appeals decision on the division of budget power between the executive and legislative branches.

That decision is commonly referred to in Albany as “Silver v. Pataki,” and it’s actually the result of two separate cases brought against then-Gov. George Pataki by the Assembly, which believed he was overstepping his executive powers by inserting policy into appropriations bills, over which the Legislature has very little control.

I wrote about this issue for Capital NY a few weeks back, speaking to a number of key players in the Silver v. Pataki cases – including former Judge Robert Smith, who wrote the plurality opinion under which the Capitol is currently operating.

Most legal experts and Capitol observers agree the decision is ripe for revisitation, especially since the judges determined there is indeed a line over which the governor might step when it comes to using the budget as a policy-making vehicle. The trouble is, the court declined to define where that line is.

Most agree that the governor’s insertion of ethics reform – specifically tying per diem changes and disclosure requirements to the state comptroller’s budget – is a stretch of even the limited boundaries defined in Silver v. Pataki.

Just today, Daily News columnist Bill Hammond wrote of the “dangerous precedent” being set by Cuomo’s use of his sweeping budgetary authority, raising concerns that future governors could “easily” abuse this power.

The problem is, challenging the governor’s ethics reform push in court would be terrible for the Legislature from an optics standpoint.

The scandal-weary public is highly unlikely to understand the esoteric argument about restoring a balance of power in Albany – especially when that involves giving more of a say to the Legislature, of which most New Yorkers don’t have the highest opinion these days.

Cuomo is well aware of this, and he also believes he’s on sound legal footing, having consulted with a number of attorneys – including Pataki’s former counsel, Jim McGuire, who is widely acknowledged as the architect behind the then-governor’s winning strategy in Pataki v. Silver.

The Assembly is no happier than the Senate with Cuomo’s budget bullying, but seems a bit less anxious to challenge his authority here – perhaps due to the fact that it is still reeling from the change in leadership and trying to get its sea legs under the new speaker, Carl Heastie.

Generally speaking, lawmakers are trying to determine whether it’s worth going to war with Cuomo now, or waiting to see if he’s really serious about being willing to risk a late budget – and a government shutdown – to get what he wants in ethics reform.

In the past, Cuomo has been willing to make deals, calling half a loaf a victory. But if he deviates from his track record this time and refuses to submit new, re-negotiated budget bills before the April 1 deadline, the Legislature could be in trouble.

Stewart-Cousins: Ahem, What About Me? (Updated)

Senate Democratic Leader Andrea Stewart-Cousins is (not surprisingly) displeased by the fact that she and her fellow minority leader, Assembly Republican Leader Brian Kolb, are being left out of the backroom budget talks that again include IDC Leader Jeff Klein, even though he no longer has a power-sharing deal with the Senate Republicans.

After the governor revealed at his Red Room cabinet meeting that the four-men-in-a-room budget talks established when the IDC and GOP split control of the chamber would continued, Stewart-Cousins responded by suggesting the time has come to get rid of this secretive negotiation process altogether.

“As we discuss ways to clean up Albany and reform state government, a perfect place to start is the much maligned three/four men in a room​ budgetary process,” Stewart-Cousins said in a statement. “In the past we had been led to believe that membership was based on constitutional roles and not simply the whims of the governor.”

“Since membership has now been expanded, I would hope all legislative conference leaders will be ​included, giving all New Yorkers a voice in the budget. The more diversity and light we can shine on this process the better it is for everyone.”

After the GOP won its slim – but complete – majority in the 2014 elections, Senate Majority Leader Dean Skelos and Klein renegotiated the relationship between their two conferences so that it’s something less than their previous status, but something more than the minority-majority relationship between Skelos and Stewart-Cousins.

Cuomo said Klein in being included in this year’s leaders meetings – the first of which is taking place right now – due to his “relationship” with Skelos, and the fact that he can deliver the votes of his five-member conference, which gives the GOP some breathing room in the closely-divided chamber.

The three men in a room process was the subject of some very public criticism by US Attorney Preet Bharara, who mocked the practice in a speech delivered the day after the arrest on corruption charges of former Assembly Speaker Sheldon Silver, and said it is the root of Albany’s many problems.

“I have a little bit of a hard time getting my head around this concept of three men in a room,” Bharara said while speaking at New York Law School. “Maybe it’s just me. I’m an immigrant from India, which is overpopulated, so for me, it’s like a billion men in a room.”

“…Why three men? Can there be a woman? Do they always have to be white? How small is the room that they can only fit three men? Is it three men in a closet? Are there cigars? Can they have Cuban cigars now? After a while, doesn’t it get a little gamey in that room?”

Bharara told The Buffalo News in a subequent interview that he keeps the book “Thee Men in a Room” by former Sen. Seymour Lachman on his desk and has met with the ex-Democratic lawmaker to discuss the frustrations he experienced while serving in Albany.

UPDATE: Stewart-Cousins is getting some backup here from Citizen Action of NY. The organization’s executive director, Karen Scharff, released the following statement:

“It’s hard to understand ​Governor Cuomo’s ​reasons for excluding the only woman legislative leader from a seat at the decision-making table. Leader Stewart-Cousins has been a champion for New York’s working families and ​is the leader of 24 senators while Senator Klein only leads 5. Governor Cuomo should open the process so that the voices of all leaders, and the voters that they represent, can be heard.”

Cuomo To Legislature: Pass Ethics Reform In Budget Or Shut Down Gov’t (Updated)

Delivering his first significant speech since the corruption scandal that took down soon-to-be-former Assembly Speaker Sheldon Silver, Gov. Andrew Cuomo today laid out a reform agenda and delivered an ultimatum to the Legislature: Pass what he has proposed as part of the 2015-16 budget, or risk a government shutdown.

“I will not sign a budget that does not have an ethics plan as outlined in my proposal,” the governor said while speaking at NYU Law School this afternoon. “…This in all probably means we will not have a fifth, on-time, amicable budget.”

Cuomo invoked his late father, former Gov. Mario Cuomo, saying he had “battled the dragon of corruption for 12 years,” but the dragon “survived.” Following a string of state lawmakers going to prison after being found guilty on corruption charges, capped by the latest charges brought against Silver by US Attorney Preet Bharara, the time has come to restore the public’s trust in government and prove it can be part of the solution – not just part of the problem, the governor said.

To do that, Cuomo is proposing a five-point plan that starts with what he said would be the strongest campaign disclosure rules in the nation – including revealing client lists from outside businesses, which he said are not protected, as lawmakers have claimed in court. “You’ve heard the phrase follow the money? We’re creating a new phrase: explain the money,” he said.

The governor also called for a constitutional amendment that would end public pensions for elected officials found guilty of wrongdoing, an overhaul of the legislative per diem system, strict new rules prohibiting the personal use of political funds , (including, presumably, using this cash to pay for legal representation, which the governor himself is going), and enactment of a host of campaign finance fixes like closing the LLC loophole, (which he himself has used to great effect), lower contribution limits and creation of a publicly financed campaign system.

UPDATE: Some of this – like public campaign finance and the LLC loophole closure – is already in the governor’s executive budget proposal. The rest of it will be included in his 30-day amendments, according to a Cuomo spokesman.

Cuomo has called for these things before, though one new element was a dicussuion of fully banning outside income for state lawmakers – something that Congress does, but no other state has yet attempted. The governor said the “cleanest” solution to end the sort of corruption that has run rampant in Albany would be to make the Legislature full time (and presumably also up lawmakers’ pay substantially), but he stopped just short of formally making that proposal, opting for the full disclosure route instead.

The governor tried unsuccessfully late last year to tie many of these reform ideas to a legislative pay increase that many lawmakers – especially the downstaters – desperately wanted after going since January 1999 without a boost in their base salary of $79,500.

That reform-for-pay trade was thought to be the governor’s maximum leverage at the time. But now he’s upping the ante still further by telling lawmakers they must pass them as part of the 2015-16 budget or risk a government shutdown.

In short: If there is no budget deal that includes the reforms for which he has called by the April 1 deadline, Cuomo will follow the lead of former Gov. David Paterson and force his plans down the Legislature’s throat by inserting his budget into the extender legislation required to keep the government running.

Cuomo acknowledged that the Legislature will likely balk at accepting the reform plan he has laid out. But he said risking his the first late budget of his gubernatorial tenure will be worth it.

The governor said he is “OK” with the idea of the first late state budget on his watch, explaining: “It is more important to me to prove we have corrected the problem and restored the trust, then just check another box.” The goal, Cuomo said, is to make the public believe that state government can be both functional and “trustworthy” – two adjectives that have been mutually exclusive during his first four years in office.

Though he pledged when he first ran for governor in 2010 to clean up Albany, the pace of legislative corruption scandals has not slowed on Cuomo’s watch. If anything, they have perhaps accelerated, thanks to the aggressive efforts of Bharara, who seems intent on changing the culture at the Capitol by sending one lawmaker after another to prison until they are willing to make the changes necessary to stem the bleeding.

Bharara has been critical of Cuomo’s decision to end his corruption-busting Moreland Commission before it completed its work, taking up with the commission left off and reportedly looking into the details of why, exactly, the governor agreed to shut it down in exchange for a modest reform deal with legislative leaders – including Silver and Senate Majority Leader Dean Skelos, whose outside income has also now drawn the downstate prosecutor’s attention.

UPDATE2: Senate Democratic Leader Andrea Stewart-Cousins is the first legislative leader out with a response to Cuomo’s speech. In short: She likes what she hears, and thinks it’s about time the governor start holding the Republicans’ feet to the fire.

““The Senate Democrats have been advocates for cleaning up Albany and restoring the public’s trust in our state government,” Stewart-Cousins said. “I am pleased that Governor Cuomo is taking the ethics reforms initiatives we have championed for and will now ensure that the Senate Republicans finally have to address these common sense measures.”

NYPIRG issued a statement saying Cuomo’s promise that he will do all he can to get some reform at the Capitol is “a welcome response to Albany’s seemingly endless scandals.” But, the good government asked: Where’s the teeth?

“(T)he governor did not describe any significant changes in the oversight and enforcement structure,” NYPIRG said. “Without changes to the ethics and campaign finance systems, no real changes will occur. The best laws are only as good as their administration. New York cannot continue to rely on the US Attorney’s office to walk the ethics and campaign finance ‘beat’ in Albany.”

Where Will Cuomo Cut?

From the Morning Memo:

Gov. Andrew Cuomo will propose his fifth state budget today, and sources say he plans to once keep spending under a 2 percent increase from last year.

The self-imposed spending cap has been a hallmark of every Cuomo budget proposal since 2011, his first year in office.

And the 2 percent cap has stuck: State lawmakers have agreed to work within the framework of Cuomo’s initial spending figure while also enacting four budgets on time.

Aside from controlling costs, the cap is a useful political tool when Cuomo touts the cap on local property tax increases, even if it is an apples and oranges comparison: If the state can stay within the bounds of a 2 percent increase in spending, then local governments and school districts should be able to do the same when it comes to the amount they collect in taxes.

But in a real way, controlling spending is linked to property taxes: Cuomo wants to use the planned surplus to help pay for a $1.66 billion property-tax relief plan that is his administration’s version of the circuit-breaker program, which ties relief to a household’s income.

Cuomo’s cap on spending this budget year will have to withstand a rather large test, according to the Citizens Budget Commission, given that he’ll have to find $1.8 billion in savings this year in order to balance the budget. The need for savings grows to a projected $2.6 billion next year and then $4 billion ahead of the 2017-18 fiscal year

Namely, spending on major cost-drivers for the state – education aid and Medicaid – are growing alongside pensions and debt costs.

“Although school aid is statutorily capped at the annual growth rate of personal income, the projected increase for next fiscal year is a much larger 7.5 percent,” the budget watchdog wrote.

Even as Cuomo talks of using a planned surplus based on these 2 percent caps, such goals are currently premature, the CBC found.

“Despite reported surpluses, under current projections, New York’s real baseline financial plan includes budget gaps expected to exceed $4 billion in two years,” the group wrote. “Savings in every area should be under consideration before new commitments are made.”

Add Valesky To ‘Syracuse Billion’ Push

Sen. David Valesky of Oneida is joining the push for a “Syracuse Billion.”

The Independent Democratic Conference member on Monday said in a statement he backed the plan as proposed by Syracuse Mayor Stephanie Miner to have the state commit to a massive infrastructure investment in the central New York city.

“Mayor Miner’s proposal contains exactly the components we need to propel Syracuse and Central New York into economic growth in the 21st Century,” Valesky said in a statement. “This plan’s singular focus is on infrastructure—investing in the physical needs and human capital to create a playing field where the entire community can grow. The Syracuse Billion proposal is a comprehensive plan that has my wholehearted support.”

Though the proposal has echos of the “Buffalo Billion” — a program that targeted private-sector job growth through specific state investment — this program Miner backs is aimed at upgrading Syracuse’s roads, bridges and sewer systems which are increasingly costly to maintain on the local level.

Republican Sen. John DeFrancisco, the chairman of the Senate Finance Committee, last week announced he also backed Miner’s proposal.

Miner will be a guest on Capital Tonight this evening.

Skelos: Property Tax Package ‘A Critical Component’

Senate Republican Leader Dean Skelos called the property-tax rebate program designed to nudge local governments on cutting costs a “critical component” of the agreed-to spending plan.

In an interview, Skelos said the multi-year rebate program was designed to shore up relief programs like STAR that were taken away.

“This is slowly trying to get back that type of property tax relief for those paying property taxes outside of the city of New York,” he said.

The tax plan would require local governments to budget within the state’s cap on local property tax levy increases and then in a second year find ways to share services. Property taxpayers would then receive the difference in the tax increase in the first year.

The property tax “freeze” was proposed by Gov. Andrew Cuomo in his January budget proposal.

The measure was altered to allow for shared service programs currently in place to be considered.

“It is tough for the local districts, but many of them already are looking at efficiencies, shared services, some areas are sharing superintendents,” Skelos said.

“So I think there are some positive steps going, but we want to look for them to continue to look for efficencies in their school district, their municipality.”

Skelos even adopted some language that Cuomo has used to spur local governments on cutting costs, noting the state has budgeted within a self-imposed 2 percent limit on spending increases.

“If we can do it, certainly our local government can do it,” he said.

Statewide Pre-K Pegged At $340M

State officials are closing in on an agreement that would fund statewide pre-kindergarten programs at $340 million in the coming 2014-15 budget.

Under the agreement, $300 million would be set aside for New York City, with $40 million for the rest of the state.

The deal comes after New York City Mayor Bill de Blasio had campaigned on a plan that would provide universal pre-K in the city with a tax on those who earn $500,000 and more a year to pay for it.

But the tax increase ran into opposition in Albany – both from Gov. Andrew Cuomo and Senate Republicans.

Cuomo had proposed spending $1.5 billion over five years, with $100 million starting in the first year, to fund pre-K.

Meanwhile, the Senate’s one-house budget resolution proposed spending $540 million, which was the number de Blasio had proposed ($340 million for pre-K and the rest for after school programs). Unlike the Assembly however, the Senate rejected de Blasio’s ask for the power to tax rich New York City residents, and instead proposed to pay for pre-K and after school programs by cutting $1 billion worth of corporate tax cuts sought by Cuomo.

DREAM Act (By Another Name) Lives?

Cardinal Timothy Dolan released a carefully worded statement this afternoon that seemed to suggest some form of the DREAM Act is very much alive as legislative leaders and the governor continue to try to hammer out a budget deal.

“We have been advocating for the Education Investment Tax Credit as a critically needed measure to help provide scholarships for families to pay tuition for children attending private and parochial schools,” Dolan said.

“At this time in Albany, there is discussion of expanding this education tax credit concept to include scholarship funding for college students in need, including those students who might not otherwise qualify for other assistance opportunities. We support this expanded concept and urge its passage.”

“Students who might not otherwise qualify for other assistance opportunities” sounds a lot to me like students who aren’t able to access state-funded programs to help pay for higher education due to their immigration status. (In other words, they’re undocumented). But Dolan, who is a DREAM Act supporter, specifically avoided any mention of the controversial legislation in his statement.

I called the state Catholic Conference spokesman Dennis Poust, who told me that during the course of negoitations “it has become clear that the framework of discussions includes some elements” of the DREAM Act. If what the four men in a room are considering is a straight expansion of the education tax credit the church has been pushing, then it would definitely apply to undocumented students, Poust said, because the bill in its current form makes no mention of immigration status.

Poust said the cardinal and the governor have been “keeping the lines of communication open,” and Dolan put out this statement because “it was felt that it would be helpful” as negotiations continue.

It had been suggested that the up to $300 million annual education tax credit could be “traded” (in budgetspeak) for the DREAM Act, which is opposed by the Senate Republicans and failed by two votes on the Senate floor last week. Assembly Speaker Sheldon Silver said the governor had put that idea on the table, but Silver didn’t think it was “viable.”

The teachers unions have opposed the tax credit, even though supporters – like Dolan – say it will help public as well as private (and parochial) schools.

Pushing for Parks

And item No. 3:

Advocates for the state parks were among those disappointed by the one-house budget resolution passed in the wee hours of the morning by the state Senate last week.

Deep in the Senate’s plan was the elimination of $92.5 million worth of New York Works capital funding that had been allocated for the third year in a row to pay for much needed park repairs and improvements.

The money was apparently scrubbed from the executive budget because the governor had failed to line out in advance exactly where it would be spent.

There has been a $1 billion backlog on work at the state’s parks and historic sites, which saw their busiest year on record with more than 60 million visits in 2013.

And that was despite the fact that some of the most popular parks were forced to close for repairs following Superstorm Sandy.

The Senate approved the previous two years worth of funding, which went to pay for everything from high-profile projects like the overhaul of Niagara falls State Park (the oldest state park in the US, by the way) to more mundane – but necessary – efforts like upgrading the electrical systems at Taughannock Falls in the Finger Lakes.

“By slashing $92.5 million from the New York State Park’s capital budget, the Senate is jeopardizing the future of New York’s state park system,” said Erik Kulleseid, executive director of the Open Space Institute’s Alliance for New York State Parks.

“With more than a billion dollars in documented repairs, upgrades and improvements needed at our state parks, we are deeply disappointed that the Senate put these funds at risk,” Kulleseid continued.

“We applaud Governor Cuomo and the state Assembly for standing up for state parks and urge the Senate to restore this critical funding.”

Assembly Dems To Include Med-Mar In Budget Bill

The one-house budget bill submitted by the Assembly Democrats next week will include a revised version of the Compassionate Care Act, which would legalize marijuana for medical use.

Assemblyman Dick Gottfried, a Manhattan Democrat who has long championed med-mar, confirmed that this is the first time in Albany history that the provision has been included in a budget bill by his conference.

“Unless something dramatic changes, yes, that is the plan,” Gottfried told me during a telephone interview this afternoon. “It’s my bill with some changes that we’ve worked up over the last couple of weeks that would have eventually gone into my bill except we’re putting them into the one-house instead…By putting it in our budget bill, we jump start a three-way discussion.”

“People might ask: Why does this belong in the budget? The answer is: When creating a new state program that’s going to cost money to administer and create a new source of state revenue, it’s perfectly acceptable to have it in a budget bill.”

One change was to have the excise tax proposed in Gottfried’s bill (being carried in the state Senate by IDC Sen. Diane Savino) from a certain number of dollars per pound to a percentage of the dispensing price. This was necessary, Gottfried said, because the sponsors realized that “a pound of dried leaf and a pound of oil extract are very different and should not be taxed the same.”

The other, more substantive change was the addition of provisions to speed up – at least on a temporary basis – the recognition of organizations that are registered to dispense medical marijuana. The way the bill had been written, it could take a year or two before product was available to patients, Gottfried said, due to the time required to write regulations, process registration applications and grow the plants.

How quickly marijuana could get into the hands of the people who need it remains something of an unanswerable question, due to the fact that the federal government would have to sign off if New York is to procure product from states where it is already legal.

“In order for this concept to work, we would have to get the Department of Justice to acknowledge that there’s nothing wrong if the product goes from one tightly regulated state to another tightly regulated state,” Gottfried said. “Because if not, there’s really no practical way anyone can think of to make product quickly available…And I really do not want to see babies dying for a year or two while they’re waiting for New York to get its system up and running.”

There has been considerable movement on med-mar in recent weeks in the Senate, with several Republicans expressing support for the Compassionate Care Act. This is widely attributed to the strong lobbying efforts put forth by a group of Western New York parents whose children suffer from devastating seizures, either caused by epilepsy or a disorder known as Dravet’s syndrome.

At least one Republican senator – Patrick Gallivan – has said he supports a very limited bill that would legalize a high CBD, low THC oil type of medical marijuana. In Colorado, it’s known as “Charlotte’s Web,” named after Charlotte Figi, who suffers from Dravet’s syndrome and was the first patient who had success with the treatment.

Gottfried said he considers it “inhumane” to patients who would need different kinds of med-mar treatment – like smoking to offset the nausea brought on by chemo, for example – to severely limit access to just one or a few types of the plant, adding: “It’s highly unlikely you could ever develop a production process in New York just to serve a dozen patients.”

The Assembly budget bill will not include any money in the coming fiscal year for med-mar, Gottfried said, because the assumption is that there will be little – if any – initial cost in setting up a med-mar system. The cost – as yet unknown – would ramp up in the 2015-16 fiscal year, but the assumption is that it would be more than covered by the revenue generated once the system gets up and running – revenue that Gottfried said could “possibly” exceed $100 million a year.

Gov. Andrew Cuomo included a limited medical marijuana plan in his budget proposal that would be established via executive order, reviving a 1980s-era law that has been dormant for years. Gottfried and others panned this approach as cumbersome and too limited in scope. Asked if the the administration has taken any steps to implement the governor’s plan, Gottfried replied:

“If you find the name of anyone in the Health Department who’s working on this project, would you let me know? I’ve been trying very hard to find out that name, and so far I’ve gotten no response.”

The administration has indicated, through top Cuomo aide Larry Schwartz, that the governor would “support” the Compassionate Care Act if it passes both houses and ends up on his desk.

Senate GOP leader Dean Skelos appears to have softened his stance on med-mar, saying he’s now open to legalizing marijuana-based oils and possibly vaporizers, but still doesn’t like the idea of “public smoking.” Skelos also has not yet agreed to letting a bill to legalize med-mar come to the floor for a vote.