New York’s state constitution requires that the legislature and the governor pass a budget by April 1st. That has not happened, as lawmakers and the governor continue to negotiate issues in the $217 billion budget that will affect millions of New Yorkers.
Thousands of pages of the 10 bills that comprise the state budget have already been published for legislators and the public to hastily review. This language has been hashed out in meetings of the leaders of the two houses—Senate Majority Leader Andrea Stewart Cousins, and Assembly Speaker Carl Heastie—and Governor Andrew Cuomo, whose negotiating power has been diminished due to the mounting investigations into allegations of sexual misconduct and the mishandling of nursing home deaths caused by COVID-19.
But in keeping with Albany tradition, some of the most controversial proposals have yet to be seen, and will be voted on last. Among those missing as of the publication of this story: revenue proposals containing higher tax rates on wealthy New Yorkers, a pandemic relief fund for undocumented and formerly incarcerated people who were left out of federal and state assistance, and a proposal to legalize online sports betting and issue licenses to casinos in New York City.
On Tuesday afternoon the Assembly Majority Leader, Crystal Peoples-Stokes, told her colleagues on the floor that the remaining language would be published in the hours ahead, though she urged them to be patient and cooperative. “We're going to need it today," Peoples-Stokes said, seemingly forecasting a late night.
"We'll clearly need messages of necessity,” Manhattan State Senator Liz Krueger said on the floor, referring to notes from the governor that allow legislation to bypass the typical three-day “aging” period for all legislation. “We are hoping to get out of here today, completing all [of the bills]."
Overall, the state will be spending an extra $18 billion more than last year. Here’s how the budget is shaping up so far:
A $4.3 Billion Tax Hike On The Rich And Corporations
Back in January, Governor Cuomo suggested that the state make modest adjustments to raise taxes on millionaires, which would net $1.5 billion, and avoid pandemic-era budget cuts being extended into the next year.
State legislators countered with their own proposal: substantial, permanent tax increases on wealthy New Yorkers and corporations that would raise $7 billion. Backed by the group Invest In Our New York, that money would go towards a fund for excluded workers, rent relief, and restoring cuts that Cuomo has made to education and health care over his three terms as governor (more on these topics below).
The governor then “located” $5 billion and insisted that taxes didn’t need to be raised at all, but that gambit has apparently failed.
Instead, the legislature has agreed to $4.3 billion in tax increases, according to the NY Times, the Wall Street Journal, and other outlets who have reported on the details of the agreement.
New Yorkers earning more than $1 million (or $2 million in joint filings) would see their state income tax rates go up from 8.82% to 9.65%. The state would also create new tax brackets for people who make between $5 million and $25 million (they’d pay 10.3%), and those making over $25 million (10.9%).
Currently, New Yorkers who report around $2 million in income pay the same overall tax rate as those who report earning $100 million or more.
All this means is that New York City residents who pull in over $25 million a year would have a combined city and state tax rate of 14.8%, the highest in the country. The increases would expire in 2027.
Still, these proposals are far less ambitious than the proposals that the most progressive state Democrats were pushing for at the beginning of the year, like a billionaire’s wealth tax and a stock transfer tax. Those proposals, they argued, would have netted $50 billion for the state.
“Raising $4.3 billion in new tax revenue next year is weak,” Brooklyn State Senator Julia Salazar, the main sponsor of the stock transfer tax bill, told Gothamist.
“At the same time, $4.3 to $4.5 billion is also multiple times more than we’ve seen in new revenue in my lifetime and in a very long time in New York,” Salazar added. “That’s an achievement that would have been absolutely impossible without the advocacy of the Invest In Our New York coalition.”
The exact details of this bit of legislation have yet to be released, though some legislators have already referenced the figures during floor debate on Tuesday. Conservatives and some wealthy New Yorkers have argued, without much evidence, that it will cost the state money, as the state’s tax base flees for warmer, less tax-burdensome states.
Still, there is an enormous amount of wealth in the Empire State. In New York City alone, there are 1,700 or so New Yorkers report making more than $10 million dollars a year, comprising nearly $57 billion in income alone, according to the city’s Independent Budget Office.
Funding For Excluded Workers
One of the final unresolved budget issues is a first-in-the-nation proposal to direct cash payments to New Yorkers who did not receive federal stimulus checks and unemployment benefits in the last year. The $2.1 billion program was initially aimed at an estimated 274,000 people who were left out of aid because of their immigration status or because they were incarcerated for part of the pandemic.
But while Assembly Leader Carl Heastie said on Tuesday that the legislature had the votes to pass an “excluded workers fund bill that covers all workers,” lawmakers told Gothamist they were still hammering out some key details. Among the sticking points is whether the program will require applicants to submit taxpayer identification, an idea that the Cuomo administration previously supported, but which advocates say would effectively exclude many of the workers they were trying to help. Multiple people familiar with the deal also told Gothamist that the legislature was looking to remove benefits for incarcerated individuals.
As immigrants and other backers of the fund launched a hunger strike and protested inside the capitol, some center-leaning suburban Democrats have pushed back against the proposal, drawing vague rebukes from a handful of progressive lawmakers. That intra-party tension spilled into the public view on Monday, after Bronx Assemblywoman Amanda Septimo tweeted that Tom Abinanti, a Westchester rep, called her a “smart ass” for misrepresenting his opposition to parts of the fund; Abinanti, in turn, accused Septimo of flipping him off while he was speaking in conference (Neither responded to Gothamist’s inquiries).
Asked about Governor Andrew Cuomo’s support for the proposed fund, Rich Azzopardi, a senior advisor to the governor, told Gothamist: “We negotiate the budget with the legislature not the press.”
Rent Relief
As expected, the budget includes details on a long-awaited COVID-19 Emergency Rental Assistance Program to address the mountain of rent debt that has accumulated since the start of the pandemic. The $2.4 billion pot of mostly federal monday is roughly 20 times larger than the previous state-funded rent relief effort, which reached only a fraction of eligible New Yorkers, in part due to its stringent eligibility requirements.
Under the new program, pandemic-affected tenants who make 80% or less of an area's median income — $81,920 for a family of three in NYC — would be eligible for up to 12 months of back-rent and utilities. Applicants who are considered rent burdened, a group that includes nearly half of NYC renter households, will also be eligible for three months of future rental assistance.
In a statement, the pro-tenant coalition Housing Justice for All praised the “strong and robust” program, which includes a year-long rent freeze and protections against evictions for landlords who accept the money. The funds will also be available to undocumented New Yorkers.
Both tenants and landlords can apply for the program, with the funds paid directly to landlords. If a landlord can’t be reached or elects not to participate, their tenant’s qualification for the aid will be considered an “affirmative defense” in a non-payment proceeding, according to the bill. Another provision in the bill would effectively cancel rent for approved tenants if their landlord doesn’t accept the payments within a year.
Joseph Strasburg, president of the Rent Stabilization Association, a landlord lobbying group, said the group had some concerns about the final language, including the fact that landlords are barred from executing “nuisance evictions” if they accept the money. But he said the group’s primary focus was ensuring that the state got the federal funding out as quickly as possibly.
“It’s long overdue,” Strasburg told Gothamist. “Hopefully this program actually succeeds where previous ones have not.”
Cuomo Gets His $1.3 Billion To Start Remaking Midtown And Penn Station
While the governor may have yielded to the legislature on marijuana legalization, banning long-term solitary confinement, and raising taxes on the rich, he reportedly would not budge on the matter of his $306 billion plan to replace the Port Authority Bus Terminal, renovate Penn Station, create an entire new terminal for NJ Transit with federal help call “Penn South,” and remake a huge swath of Midtown in the process. Developers are already calling it “The Penn District,” which includes a building nearly the size of the Empire State Building, dubiously named “PENN 15.”
“It will be the most ambitious mass transit development in the United States of America,” Cuomo said when he unveiled the plan in January.
Moynihan Train Hall, Penn Station, and the new terminal Cuomo is proposing
The state budget now includes language that allocates the first slot of money for the project—$1.3 billion.
The plan has faced intense criticism by local and state leaders, who have accused the governor of bigfooting local planning processes.
However, the language in the budget says the $1.3 billion can only be spent on transportation improvements, and “not for above-grade development contemplated in the general project plan.”
“It's really important that the process be more open and responsive than it has been,” said Brian Fritsch, of the Regional Plan Association, which supports the project but has asked for more public input.
“The transportation improvements should be front and center in this discussion and they really haven't been up to this point.”
For all his focus on this massive transportation plan, Cuomo initially proposed a $145 million “raid” on the MTA’s budget, transferring that money to the general fund; this is in addition to the $98 million cut imposed on the transit service last year. It’s still not clear if the legislature has rejected or restored these cuts, as that budget language is still being withheld.
“The governor needs to keep fixing the subway—and maintaining service and fares—at the top of his agenda,” said Danny Pearlstein of the Riders Alliance.
15 Years After A Historic Court Ruling, Equal Education Funding
The budget also includes a major infusion of cash for education, including billions of dollars of stimulus money to reopen schools, and an increase in annual state funding for districts.
As a result, the state will finally meet its obligations to schools under a lawsuit filed by New York City parent—called the Campaign for Fiscal Equity—15 years ago.
“This is absolutely monumental and this has been a long, long fight to get us here,” said Jasmine Gripper, executive director of the Alliance for Quality Education.
In 2006, the courts called on New York to increase funding for schools statewide, but that increase was put on pause after the 2008 recession, and the state ultimately cut funding instead.
Now the additional money, called “foundation aid,” will be phased in over the next three years, to be covered by the new taxes on millionaires and billionaires.
That ongoing funding increase comes on top of a massive stimulus package for schools.
New York state is set to receive about $12 billion from the last two stimulus packages from December and March.
Gripper said the state hasn’t released the specific dollar amounts each district will receive, but when it does, it will be up to local governments to distribute the money through their own budgets. Mayor Bill de Blasio is expected to release his revised city budget, which will reflect the increased state funding and a portion of the stimulus money, this month.
Affordable broadband internet, crossbow hunting for pre-teens, downstate casinos
Among the major miscellaneous additions to the budget:
-New Yorkers who are currently eligible for Medicaid, SNAP, and free/reduced lunch, will be able to get high speed internet for $20/month. WMHT has more details here.
-Negotiations over whether to allow existing video casinos in and around New York City to operate as full casinos, or grant new licenses to full casinos in the city, are reportedly all over the place. The deal itself may end up being cut out of the budget and addressed at the end of the session this summer.
-Governor Cuomo’s proposal that would allow 12-year-olds to obtain crossbow hunting licenses has survived the budget process.
-Online sports betting is expected to be legalized in the budget, raising as much as $500 million in revenue for the state. Details on what the industry will look like, and how it will be regulated, are still not available, though it looks like Governor Cuomo's preferred plan will mostly stay intact.
Additional reporting by Jessica Gould.
