As a midnight Saturday deadline looms, negotiations are in full swing for New York State's 2019 budget, with more eyes on the bottom line than in recent years. The federal Republican tax bill has raised greater concerns about deficits and cuts to the budget, at a time when New Yorkers are demanding more help from the state for the city's public housing and the subway system. Here are five things to look out for in the down-to-the-wire budget talks.
Funding for NYCHA
With Governor Andrew Cuomo visiting the city's public housing complexes three times in March, the crisis facing New York City Housing Authority (NYCHA) residents is receiving significant attention. The agency is under fire for its chairwoman certifying that NYCHA had conducted lead paint inspections in apartments from 2013 to 2016, when it did not.
In addition, more than 300,000 New Yorkers are desperate for help after a winter filled with heating and hot water outages, due, in part, to aging boilers. Mayor Bill de Blasio announced a $200 million plan in January to improve the heating systems in 20 NYCHA developments, and said this month that the city would expedite repairs, but many City Council members have called on the state to help.
Cuomo has said he would fight to make sure the state budget allocates $250 million directly to NYCHA, in addition to $300 million that the state had already pledged to help the housing authority in 2015. But there are crucial considerations in the budget for the help. Cuomo said private contractors would need to be brought in to make the repairs.
The city's public housing funds also face the obstacle of the state legislature. The Assembly and the state Senate have had difficulty releasing some of that $300 million already promised, and they would need to approve the additional $250 million. Republicans in the Senate have previously been reluctant to do things for the city because of negative feelings toward de Blasio. The Assembly has proposed $200 million for NYCHA in its own budget. The Senate included no funds.
Congestion pricing might be nearly as important of a battle as the NYCHA fight, but the prospects of the state imposing new tolls on motorists entering the busiest parts of Manhattan are not excellent. The governor favors congestion pricing as a solution to raise revenue to fix the city's ailing subway system, which is seen as a political vulnerability to him. In January, a task force commissioned by Cuomo recommended $11.52 tolls for motorists driving south of 60th Street, with $25.34 tolls for trucks, and fees between $2 and $5 for Uber rides and for-hire vehicles. Cuomo didn't endorse the details of that plan, but said last year that congestion pricing is "an idea whose time has come.''
New Yorkers will want to pay attention to see if he manages to make any headway against the legislature — support, at this time, is not strong. Republicans in the state Senate do not favor congestion pricing, while the Democrat-led Assembly has endorsed a significantly scaled-back proposal that would impose new fees on taxis, limos, and Uber and Lyft rides.
The news is likely to cheer the commuters and commercial drivers whose opposition has helped sink earlier congestion pricing plans. But environmental groups and mass-transit advocates say the city and state must invest in transportation options that take cars off the streets. Similar toll systems are already in place in cities such as London, Stockholm and Singapore. New Yorkers are arguably more frustrated with traffic and subway chaos than ever, but it's not clear if that anger will change the minds of state lawmakers during the budget negotiations.
Cuomo included a proposal for early voting in New York State as part of his budget amendments. New York is just one of 13 states that doesn't allow early voting by mail, and the governor proposed providing $7 million in state money to cover the cost of early voting administered by the counties.
But while the Assembly favors the plan, New Yorkers should not be surprised if the proposal goes nowhere during budget negotiations. The Senate is opposed to the plan, with some state Senators saying early voting is an unnecessary cost, arguing that New Yorkers should simply vote on the election dates. Republicans have traditionally been against increasing access to the polls; Democrats outnumber Republicans 3-to-1 in New York State.
Tax hikes proposed by Cuomo
Known more colloquially as "revenue raisers," the governor has proposed about $1 billion in taxes and fees. The governor has said they are needed to avoid cuts to such vital areas as public education and health care, especially after the federal tax overhaul, which is expected to hurt the state's bottom line.
Among the proposals are: a $120 fee imposed whenever the state Department of Transportation inspects motor coaches and other private for-hire, for-profit vehicles allowed to carry passengers; a broadening of the tax on e-cigarette and vaping products sold by distributors; targeting internet sales sites that link buyers to third-party sellers, and broadening the state's existing sales tax law to charge a sales tax on transactions carried out on such sites as Amazon Marketplace and eBay; a two-cents-per-milligram tax on opioids sold in the state, to be paid by drug manufacturers; and a 14 percent surcharge on the profits of health insurers to help cover the state's rising health care costs.
New Yorkers may not see any budget fight over the proposed tax hikes, as the governor does not have strong support for his proposals. The Republicans in the state Senate, who are almost always opposed to tax increases, have firmly slammed the proposals and have said there is no way they will allow them to pass. Meanwhile, the Assembly has not jumped out to back them.
Cuomo's push to reshape New York's tax code
Another proposal from the governor for the budget is to restructure the state's tax code in response to the federal tax bill, moving from a state income tax to a payroll tax. Another idea, which has received less attention, would create two new state-controlled charities. New Yorkers could then donate to funds for health care and education and write off those contributions on their federal taxes.
The governor's specific proposals may not see the light of day in the budget, but it is possible that some kind of tax overhaul is at least debated this month to respond to the tax bill, especially since New York is slated to be hard hit by the bill's $10,000-per-household cap on State and Local Tax (SALT) deductions. The loss of these deductions is not going unnoticed in Albany, as they could hurt high-income earners, which are significant to Cuomo's base.
The door could open for negotiations on tax changes in this election year budget battle. The governor has not has presented his tax changes as part of a series of options, not favoring any one single solution; Senate Majority Leader John Flanagan did not rule out passing some kind of tax overhaul as part of the budget; and Assembly Speaker Carl Heastie has been more supportive of the governor, saying it would be "unacceptable" to not take some kind of action.