ALBANY – Democrats who control the State Legislature offered a simple message to Gov. Andrew M. Cuomo on Tuesday: Spend more state money on the state’s 700 public school districts, Medicaid, local governments, transportation and other initiatives.
The Legislature unveiled its separate, one-house budget bills, which will be approved Wednesday and serve as a template for legislative priorities in fiscal negotiations that are now heating up between lawmakers and Cuomo. The new fiscal year starts April 1.
Some of the legislative fiscal changes, like every year, were expected from lawmakers who, by the nature of their job, deal more directly with constituents than the governor.
The Senate, for instance, wants to give public schools an overall education aid increase of 6 percent, or more than $600 million beyond the $1 billion Cuomo proposed in January. “We are very, very committed as a conference to education," said Senate Majority Leader Andrea Stewart-Cousins, a Westchester County Democrat.
The Assembly and Senate agree that school aid should rise $1.6 billion over the current year to a total of $28.4 billion.
Reconfigurations, re-estimates and tax hikes
The Senate pays for all the additional spending by cutting some Cuomo spending ideas, re-estimates of what Cuomo thinks some spending might actually cost and things like “efficiencies” to the state workforce.
The Assembly, too, reconfigures some Cuomo spending priorities, but also seeks a number of tax hikes.
Senate Democrats also have some revenue raising ideas: $90 million from registration fees and taxes associated with letting New York State offer online sports wagering, instead of just at four upstate casinos as envisioned by the Cuomo administration.
Like the Assembly, Senate Democrats are embracing legalization of marijuana; both sides, however, say they have concerns about some aspects of a plan advanced in January by Cuomo, who on Tuesday again said the issue is not likely to be resolved in the budget talks.
The Assembly budgeted $35 million in its plan for creation of a state marijuana regulatory office. Unlike Cuomo, who wants to appoint the sole person to lead the office, the Assembly wants a panel of people named by both Cuomo and lawmakers. Lawmakers also want minority communities, which they said are targeted with disproportionate marijuana arrests, to be earmarked for a variety of programs funded by marijuana sales taxes.
In its one-house plan, the Senate gives geographic rewards to its members. One example is the $6 million gotten by Sen. Tim Kennedy, a Buffalo Democrat, for additional funding for the Niagara Frontier Transportation Authority to do a preliminary engineering report for an Amherst to Buffalo Metro Rail expansion, along with other funding hikes for the NFTA.
Senate Democrats also say they will go along with Cuomo’s plan to ban single-use plastic bags at stores, but are insisting on a new fee to be imposed on paper bags as a way to better encourage use of recycling bags.
Plan to tax mega-rich
In the Assembly, Democrats are helped in getting to their spending number for public schools to New York City subway capital efforts by a major method: going after super-wealthy individuals who both reside and sort of reside in the state.
Assembly Democrats want to take an existing income tax surcharge on millionaires and add three new, higher tax brackets to super-wealthy people. They are proposing a top rate, for instance, of 10.32 percent on people making more than $100 million a year.
The Assembly estimates that tax surcharge idea will raise $1.3 billion when fully effective.
The Assembly also is embracing a tax that Democrats, including Cuomo, have been recently floating: hitting up rich people who own second homes in New York City. The "pied-a-terre tax" imposes an additional property tax from .5 percent on a home valued at $5 million and 4 percent on second residences valued over $25 million. Revenues from that will be earmarked for New York City transit repairs.
Cuomo sought to raise fiscal red flags even before both houses unveiled their budget plans. “The big question is going to be the fiscal integrity of their budget proposals,’’ Cuomo said in a radio interview Tuesday.
Cuomo continues rhetorical battle with lawmakers
Cuomo repeated several items he demands be in the budget – making permanent the state’s property tax cap; some defendant-friendly criminal justice changes; and public financing of campaigns. Cuomo then repeated what is becoming a mantra for him: Perhaps Senate Democrats have not been up to the task of governing since taking over the Senate in January.
“I don’t even know why he’d say that," responded Stewart-Cousins, noting the Senate Democrats have already shown a willingness to back Cuomo-supported ideas both before and during the budget process. She coined an ailment – “SDDS” – that she said Cuomo might be suffering from: “Senate Democratic Derangement Syndrome."
Cuomo also on Tuesday saved a little bit for the Assembly Democrats, saying they were “carrying the agenda” of the state teachers union in, so far, opposing making the property tax cap law permanent.
Both houses restore Cuomo proposed Medicaid cuts to hospitals and nursing homes.
Other parts of the Senate Democratic plan include:
• Increasing the minimum college Tuition Assistance Program award and increasing the income eligibility, while increasing the main operational funding program for public school districts by 6.8 percent.
• Rejecting, along with the Assembly, Cuomo’s changes and cuts to the Aid and Incentives to Municipalities funding program that go to localities.
• Eliminating Cuomo-proposed changes to cap certain STAR property tax benefits as well as his effort to lower the income level for the Basic STAR exemption to $250,000.
• Embracing an increase to $588 million for the basic state funding program used by localities for street, road and bridge repairs.
The Senate said it also agrees with Cuomo on a taxpayer-supported campaign finance system, and says it will reject his idea to require volunteer-run and grassroots groups to register as lobbyists.
The Senate and Assembly will try once more to create a publicly searchable database of all economic development deals – who gets what amount of funding and how many jobs were created – that was spawned following the Buffalo Billion bid-rigging scandal.
The Assembly plan, which seeks to spend just under 1 percent more than Cuomo in the section of the budget paid for mostly by state taxes and fees, also includes:
• A requirement that members of regional councils that advise Cuomo annually release information about their personal finances in order to prevent conflicts of interest, and giving back certain pre-audit powers to the state comptroller taken away before the Buffalo Billion controversy.
• Restoration of a long-dead consumer advocacy office “to represent the interests of residential utility customers” in rate-making and other matters, and rejection of Cuomo’s plan to permit electric scooters on the streets and sidewalks of the state.
• Acceptance of a Cuomo-proposed hike in passenger car rental taxes upstate to help fund upstate transit systems and a new tax credit to employers who hire people in recovery for substance abuse problems.
• Expansion of an historic property rehabilitation tax credit to more areas of upstate.
Of a multibillion dollar, two-year drop in expected tax revenues that Cuomo projects, Assembly Speaker Carl Heastie said the Assembly budget “recognizes the financial challenges we are facing but protects the progress we have made” in areas of health care, education and transportation programs.
“This is not the first time the state has faced financial challenges, and it will not be the last,’’ said the Bronx Democrat.