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Assembly Democrats tie fate of New York City rent control to upstate tax collection measures

ALBANY – With rent control laws in New York City still not finalized, downstate Assembly Democrats have employed a new strategy to prod Senate Republicans into a deal: Link the rent program’s future to revenue bills affecting nearly 50 counties upstate and on Long Island.

The $2 billion gambit by Assembly Speaker Carl Heastie outraged Senate Republicans on Monday, a day before rank-and-file lawmakers were to return to the Capitol to try, once again, to end the 2015 session and resolve measures on everything from Common Core tests to the relaxing of some criminal justice statutes.

But the move by Heastie appeared to give the Assembly new leverage to prod the Republicans toward a deal.

Heastie’s plan would link the New York City rent control program to pro forma exercises every couple years that renew county sales, hotel and other tax measures.

The New York State Association of Counties said Monday the threat by Heastie would affect sales tax efforts in 44 counties, including Erie and other Western New York counties, along with hotel tax extenders in Chautauqua County and mortgage tax rate extenders in Cattaraugus County.

The negotiating move by Heastie got the attention of the counties’ group. In a memo to county leaders across the state, the group called the move “another display of the rampant dysfunction in the state Capitol.”

Linking local sales tax measures to a New York City housing program represents “an unprecedented threat to local government services in Long Island and upstate,” the group said.

Local governments must get the approval from Albany for additional sales tax levy rates. The sales tax revenues are a major source of revenues for localities. The counties’ group said all of the counties will see their sales tax extenders expire in the fourth quarter this year – unless state lawmakers OK their continuation before ending the 2015 session, presumably sometime this week.

Senate Majority Leader John Flanagan, a Suffolk County Republican, accused Heastie of trying to hold counties hostage. He said the alternatives for counties would be to raise property taxes to make up for the additional sales tax revenues they rely on.

“That’s unacceptable,” Flanagan said in an interview Monday.

The senator’s comments came shortly after Heastie characterized as a “nonstarter” a Senate plan released over the weekend to extend New York City rent control laws for another six years. Heastie said the Senate proposal does not contain enough provisions to encourage affordable housing.

Besides rent control, New York City issues were central in the closed-door talks Monday between Gov. Andrew M. Cuomo, Heastie and Flanagan as the three men tried to get deals before lawmakers return to the Capitol on Tuesday. Also being discussed is a tax break program for New York City housing developers and whether to continue to let Mayor Bill de Blasio control the city’s school system.

“Everything that’s being talked about involves affordable housing and education,” Flanagan said.

The Senate leader said the Republican push to extend the state’s property tax cap program “is about affordable housing,” just like the talks over New York City rent.

Flanagan said the Senate in closed-door talks is still pushing for income verification for people who live in rent-controlled apartments in New York City. He likened it to the state’s STAR property tax program, in which residents must verify their address and income in order to receive the tax breaks.

“I don’t think that’s unreasonable. We ask almost three million people to do that. Why can’t we do that for the people in the city of New York so we can actually find out if someone is getting affordable housing?” Flanagan asked.

Flanagan said the private talks with Cuomo and Heastie also involve the state’s Common Core-based standardized testing program for public schools, including the actual tests given students, release of the test information, steps for better student outcomes and how to improve professional development for teachers.

“I would say we’re getting closer but no final resolution,” Flanagan said. “These things are all sort of interwoven.”

Asked if the negotiations could drag on beyond this week, Heastie told reporters, “We’ll see. It was a good conversation today.”

A round of late afternoon, three-men-in-a-room talks produced no deals, or none that they were willing to disclose before meeting with rank-and-file lawmakers Tuesday at the Capitol.

Cuomo has not publicly commented on the issues he is discussing in his Capitol office with Flanagan and Heastie.