ALBANY — With shaky financial markets starting to hit state revenue, Gov. Andrew M. Cuomo on Tuesday proposed a 2019 state budget heavy on social policies and an assortment of new ways to bring in more taxes.
The plan includes legalizing recreational marijuana, allowing sports gambling at upstate casinos, a new way to drive state education aid to schools with low-income students and expansion of the state's bottle bill.
The governor called for a $175.8 billion spending plan, up 2 percent, that would be balanced in part by $1.3 billion in new tax and fee hikes. That does not include $300 million the state expects in the coming years from three new taxes associated with plans to legalize adult recreational marijuana use.
Projected personal income tax revenues — a key barometer of the state’s fiscal and economic health — are expected to slide. But Cuomo proposed a litany of new spending ideas paid for either with cash or through borrowed money.
The governor’s budget, if adopted by lawmakers, includes $50 million for revitalization projects on Buffalo’s east side.
It also includes $150 billion in statewide infrastructure improvements over the next five years and new drinking water system updates.
The budget was presented amid a new political reality for the Democratic governor: an all Democratic Legislature that is already moving to pass many of the policy items he proposed before the budget takes effect on April 1.
“It’s a lot, but there’s been a lot bottled up for many, many years,’’ Cuomo said of his agenda now that the Republicans have lost control of the state Senate.
“It was a Democratic budget from a Democratic governor ... The devil is in the details,’’ said Assembly Speaker Carl Heastie, a Bronx Democrat.
One fiscal watchdog group, however, raised warning signs that the governor’s budget would increase spending without building up a rainy day fund at a time when many economists are predicting recessionary times ahead.
“We’re building our spending base … but not building our reserves to weather a potential downturn,’’ said Andrew Rein, president of the Citizens Budget Commission, a think tank that examines the state’s budget.
Meanwhile, education-related groups were already calling Cuomo’s aid increase for nearly 700 school districts dead on arrival with lawmakers who traditionally add considerably to the governor’s school plans. Cuomo's proposal would add $338 million or 1.9 percent to the main pot of money distributed to schools for education programs.
A group representing school boards said Cuomo “continues his crusade to erode local-level school decision making” by having Albany dictate which schools in a district get what amount of funding.
Cuomo turns to marijuana
Less than two years after calling marijuana a dangerous “gateway” drug, Cuomo on Tuesday advanced the Cannabis Regulation and Taxation Act. It would create a three-tiered system — similar to alcoholic beverage laws — regulating the cultivation, distribution and retail sales of marijuana to adults over the age of 21. The administration did not say how many retail outlets might open, or when, but said counties and large cities could “opt out” of participation.
Cuomo’s plan, which would create a new state agency called the Office of Cannabis Management, also seeks to seal criminal records of people with past marijuana arrests and drive the industry to be staffed by unionized workforces and located in low-income neighborhoods.
“Stop the disproportionate criminal impact on communities of color and let's create an industry that empowers the poor communities that paid the price and not the rich corporations that come in to make a profit,’’ Cuomo said.
The governor estimated pot sales would bring Albany $300 million annually in tax revenues. His budget plan, however, shows zero revenues this year and just $83 million in 2020.
Home cultivation would be limited to patients enrolled in the state’s medical marijuana program; they could grow up to four plants in their homes. Taxes would be levied on wholesalers based on weight of the plant, and sales taxes would total 22 percent, a small part of which would be given to counties that permit marijuana sales.
Sports betting urged by Cuomo
Cuomo also called for permitting sports betting at four upstate casinos. “It’s here and it’s a reality,’’ he said.
The U.S. Supreme Court last year ended a federal ban on sports betting, and various gambling interests have been pushing to get New York to legalize sports gambling on a widespread basis, including via online wagering platforms.
But Cuomo officials have been telling stakeholders they want a narrower program that would limit sports betting to four commercial casinos approved as part of a 2013 constitutional amendment and statute. The state in 2013 already approved sports betting at those casinos if the federal ban was ever lifted; the state still needs to issue rules to make that happen.
Offering anything more than in-person wagering at the upstate casinos would be a violation of the state’s constitution, administration officials said Tuesday night.
The four facilities are located in Seneca County east of Rochester, Schenectady, Tioga County and the southern Catskills. If sports betting goes to those casinos, Native American tribes say they are, too, entitled to offer the wagering at places such as the Seneca Nation’s three casinos.
A hodge-podge of fiscal, social actions
The governor’s budget seeks to place certain limits on the state’s STAR property tax program and again will try to collect sales taxes on certain internet transactions. It would also creates a new tax on vapor products.
Other policy proposals include:
• Expanding the state’s bottle bill to cover most non-alcoholic beverages, which will be a money-maker for the state courtesy of consumers who don’t bring their used containers back for their nickel deposits.
• Banning single-use plastic bags used at stores
• Ending cash bail and changing the legal discovery process to ensure more speedy criminal trials.
• Seeking a constitutional amendment to ensure abortion rights.
• Raising the tobacco purchase age from 18 to 21.
The budget proposal also calls for spending $150 billion on infrastructure projects over five years, but Cuomo did not say precisely where or on what.
After last year’s Buffalo Billion corruption trial, Cuomo is also proposing to make certain changes to how some state contracts are awarded, including a certification form to be submitted for approval by the state comptroller and Cuomo’s Office of the Inspector General. The budget plan, however, does not restore the full pre-audit powers of the comptroller — an authority many lawmakers say they will push to include in the final budget.
Heastie, the Assembly leader, said he understands why Cuomo jammed so many non-fiscal policy matters into the budget as a way to try to force Senate Republicans to go along with his ideas. But with an all-Democratic Legislature, Heastie said: "There's probably not a need to do it."
Local governments, accustomed to getting bad news from the governor in his budget plans, got another sting on Tuesday. Cuomo not only once again called for flat-lining the state's main, unrestricted aid to local governments -- called the Aid and Incentives for Muncipalities program -- but he also proposed ending any access to the AIM funding for localities that don't rely on the money for a certain percentage of their own budgets. Localities use the state money, like school districts do, to pay for a range of government services.
Peter Baynes, executive director of the New York Conference of Mayors, which represents leaders of cities and villages throughout the state, said the "vast majority" of localities will qualify for no AIM funding under Cuomo's plan. "If the goal this legislative session is to enact progressive tax reform, it will not be achieved by cutting local aid and removing municipalities' ability to follow through on their goal to reduce the regressive property tax burden,'' Baynes said.