Plugged In @ Hinman Straub

March 19, 2021

What’s Inside

  • Legislature Releases One-House Budget Bills
  • Assembly Announces Law Firm Hired to Investigate Governor
  • Governor Proposes Advanced Building Codes, Appliance and Equipment Efficiency Standards Act of 2021
  • Higher Education Capital Matching Grant Program Awards Announced
  • Upstate Lawmakers Form Bipartisan Caucus
  • Political Updates
  • Reminders and Links
  • Coming Up

Legislature Releases One-House Budget Bills

Both the Senate and Assembly released their one-house budget proposals this week. Each house has staked out their position on proposals included in the Executive Budget and added new provisions of their own. An overall takeaway is that both houses intend to work on many issues outside of the budget process, where the Governor has less leverage. Broad highlights of the one-house proposals include:

Revenue

The Assembly proposal increases the personal income tax (PIT) rate on those earning $1 million or more and creates two new PIT brackets for high income earners of $5 million and $25 million per year. The Assembly also includes a 1 percent surcharge on capital gains for those earning more than $1 million per year. A new 18 percent surcharge would be applied to corporate franchise taxpayers, corporate utility taxpayers and insurance taxpayers and would reinstate the minimum business tax on corporate capital. The Assembly proposes a pied-a-terre tax and a new tax on mezzanine debt and preferred equity investments. Finally, the Assembly proposal would increase the top rate for the estate tax from 16% to 20%.

The Senate proposal increases the top PIT rate on high income earners and imposes a surcharge on the same. The Senate also increase the corporate franchise tax rate by 3%. The Senate proposal advances language to reintroduce the capital base test to the corporate franchise tax. Like the Assembly proposal, the Senate imposes a 1% capital gains tax on taxpayers subject to the state’s top PIT rate. The Senate increases the estate tax by 2%. The Senate also includes a new tax on mezzanine debt and preferred equity investments.

Each house raises taxes by around $7 billion for fiscal year 2021-22.

Housing

The Assembly makes additional investments in housing including billions in state and federal dollars to provide rent relief for tenants and landlords, mortgage relief for homeowners, and to support homeless initiatives. The Assembly’s plan proposes $2.1 billion to create a fund for New Yorkers who do not have access to unemployment, federal stimulus funds and other assistance programs during the COVID-19 pandemic. The proposal also includes $750 million for NYCHA and $100 million for Mitchell Lama housing.

The Senate also proposes to supplement NYCHA with $750 million in additional funding and increases statewide housing program assistance to $200 million. The Senate allocates $200 million for homeowner assistance and $400 million for rent relief. The Senate proposes cash subsidies for low income individuals and families that are threatened with homelessness. The Senate creates the Housing Our Neighbors with Dignity Act, allowing the Division of Housing and Community Renewal (DHCR) to acquire vacant commercial properties and distressed hotel properties with fewer than 150 rooms in New York City and convert them into permanently affordable residential housing.

Education

The Assembly proposal increases Foundation Aid by $1.4 billion as part of a plan to fully phase Foundation Aid in over three years. The Assembly’s plan would provide that school districts receive at least 60 percent of their Foundation Aid funding for SY 2021-22. Foundation Aid would be funded for a total of $19.8 billion. The Assembly would ensure that the Executive proposal to allow specific  pandemic related costs incurred in 2019-20 to be eligible for transportation aid is expanded to include standby cost, and extend toe proposal through the 2020-21 school year.. The Assembly’s proposal eliminates the Executive’s proposal to merge Expense Based aids into a Services Aid block grant, restoring and fully funding the individual aid categories. The Assembly’s proposed budget also includes $75 million to create new prekindergarten slots across the state.

The Senate proposal provides a total School Aid increase of $5.7 billion, including a $1.37 billion Foundation Aid increase and $3.85 billion in federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act funding. The Senate proposes to utilize federal aid to supplement, not supplant, State funding. Similar to the Assembly proposal the Senate proposal would ensure that the Executive proposal to allow specific  pandemic related costs incurred in 2019-20 to be eligible for transportation aid is expanded to include standby cost, and extend toe proposal through the 2020-21 school year.. The Assembly’s proposal eliminates the Executive’s proposal to merge Expense Based aids into a Services Aid block grant, restoring and fully funding the individual aid categories Much like the Assembly proposal, the Senate provides for a three year phase in of Foundation Aid and every district is guaranteed at least 60% of their Foundation Aid funding for the 2021-22 school year. The Senate one-house provides $500 million to fully-fund four-year-old full-day prekindergarten statewide.

Environment

The Assembly proposal provides $400 million for the Environmental Protection Fund, which includes $100 million in anticipated federal funding. It also includes $500 million for clean water infrastructure projects.

The Senate proposal includes the $3 billion environmental bond act from last year’s final budget and advances a proposal to impose product stewardship requirements on producers of paper and packaging.

Health

The Assembly proposal would make $376 million in restorations to the Medicaid program, including $73.9 million for hospitals and $74.25 million for Managed Long Term Care (MLTC) programs. The proposal also includes $393 million in restorations to public health programs that were eliminated by the Executive Budget.

The Senate proposal restores $180.5 million in Medicaid cuts to hospitals, $74.25 million to long term care, $60 million to mainstream managed care, and funding for various other Medicaid-supported programs. The Senate rejects the extension of the Medicaid Global Cap through State Fiscal Year 2022-23. The Senate creates an Opioid Settlement Fund that will consist of state monies received through settlements of litigation related to prescription opioids and to establish an Advisory Board to make recommendations for distribution of the funds. The plan provides $200 million for acute care facilities and nursing homes to increase nurse staffing levels to provide better quality of care for nursing home patients. The proposal also provides funds to increase the minimum wages for home health care workers.

Small Business Assistance and Recovery

The Assembly’s proposed budget includes $1 billion for a new Small Business Reopening and Relief Grant Program to help small businesses with a $500 million set-aside for companies in priority businesses. The Assembly plan also includes $50 million for the COVID-19 Recovery Workforce Initiative

The Senate proposal funds $1 billion for small businesses by adding $500 million for Small Business Assistance Grants and $500 million for Commercial Rent Relief.  The Senate also restores $1.4 million for additional economic development initiatives.

Next Steps

The Assembly, Senate, and Executive will engage in negotiations toward an agreement on a final budget which is due by April 1st.

Assembly Announces Law Firm Hired to Investigate Governor

The Assembly Speaker announced that the Assembly Judiciary Committee has retained the law firm Davis Polk & Wardwell LLP to lead an impeachment investigation into allegations against Governor Cuomo. According to a press release, their team, including Angela Burgess, Greg Andres and Martine Beamon, will work with Assemblymember Lavine and the Assembly Judiciary Committee to lead the investigation and are authorized to pursue all the evidence to determine the extent to which violations of the law have occurred.

The announcement comes after audio recordings of the Assembly Majority Conference discussions surrounding the issue of impeachment were leaked to the press, angering the Speaker and causing an interruption in voting for an emergency conference where the Speaker voiced his displeasure with the violation of trust. The Speaker announced that majority conferences would be held in smaller groups on an as needed basis going forward.

Governor Proposes Advanced Building Codes, Appliance and Equipment Efficiency Standards Act of 2021

The Governor proposed a program bill called the Advanced Building Codes, Appliance and Equipment Efficiency Standards Act of 2021 to strengthen the State’s building codes, improve energy and water efficiency and reduce greenhouse gas emissions in New York State. The bill requires that the next New York State Energy Conservation Construction Code be updated to put the energy efficiency and greenhouse gas emissions reductions from these actions on a course to contributing to the emissions reductions required by the Climate Act. Additionally, the legislation expands appliance standards categories to cover a wider range of products and prevents appliances that do not meet minimum performance levels from being sold, leased, or installed.

Governor Cuomo said:

“Advancing stronger building codes and energy efficient appliance standards is a win-win for New Yorkers, setting a higher bar not only for our State’s building stock, but for the products we use every day. This comprehensive legislation reduces energy and water consumption, makes sure substandard products will be removed from the market, and enhances the quality of products available, all while reducing emissions that contribute to climate change. This is a step forward to help lower utility bills and improve the quality of life for all New Yorkers.”

Higher Education Capital Matching Grant Program Awards Announced

$57.2 million in grants for capital projects at 35 colleges and universities across New York State through the Higher Education Capital Matching Grant Program were announced this week. HECap awards support projects that provide increased training in health sciences through construction of new laboratory and research spaces, the purchase of new instructional technologies and medical equipment, and a variety of other capital investments and improvements.

The funds were awarded at the March 12 meeting of the HECap Board, which provides matching grants to private, not-for-profit colleges and universities for projects that enhance educational opportunities for New Yorkers, create construction jobs and drive investment in communities across the state.

A full list of award recipients can be found here.

Upstate Lawmakers Form Bipartisan Caucus

Assemblyman Angelo Santabarbara (D) and Senator Daphne Jordan (R) have joined forces to lead a bipartisan legislative caucus formed to address upstate issues. The caucus in Albany will focus on skills-based education issues, economic development reform and bolstering innovation. So far, 10 lawmakers have joined — five Democrats in the state Assembly and five Republicans in the state Senate.

Senator Jordan said:

“This new caucus presents the first time Upstate leaders from both parties have united to seek holistic government reform in a bipartisan manner. I’m proud to lead this effort with Assemblymember Santabarbara and so many of our colleagues. We’re ready to roll up our sleeves, reach across the aisle and get this done!”

Assemblyman Santabarbara said:

“As Upstate legislators, we share challenges that rise above party lines. From agriculture to tourism, our region provides invaluable resources and unique industries that will be key to building a brighter future for our entire state. I’m eager to work with Senator Jordan and colleagues from both parties to advance a comprehensive agenda this legislative session that takes on the issues facing our upstate communities and builds back our economy stronger than ever.”

Political Updates

Cuomo should resign if allegations confirmed: Biden in exclusive ABC News interview.Cuomo’s 3-part survival plan.

NY Times: How Cuomo’s Team Tried to Tarnish One of His Accusers here.

Stewart-Cousins claims she hasn’t spoken with the Governor in weeks.

Empire State of Play: Trio of GOP lawmakers weigh D.C.-Albany switch.

Low-profile Lt. Gov. Kathy Hochul is no stranger to politics.

The endorsements for NYC mayoral candidates.

Reminders and Links

City & State NY’s Weekly Winners and Losers here.

City & State NY’s 2021 Law Power 100 here.

Coming Up

JCOPE will hold its next meeting on March 23.

The Senate will hold a public hearing on diversifying agriculture and addressing food justice alongside continuing inequalities in our food systems on April 7.

The Senate will hold a public hearing on East Side Access/East Side Tunnel project oversight (MTA/Amtrak) on April 7.

The Board of Regents will hold their next meeting on April 12 and 13.

The Senate will hold a public hearing to discuss and receive input from stakeholders on the Climate and Community Investment Act (CCIA) on April 13.

The Public Service Commission will hold its next meeting on April 15.

The Senate will hold a public hearing to examine potentially unfair and deceptive practices occurring in New York State’s primary and secondary ticket marketplaces for live events in order to identify any legislative and policy reforms that would help ensure sales are fair, equitable, transparent, and accessible for consumers and other stakeholders on April 22.