The Senate and Assembly passed a joint resolution authorizing the use of videoconferencing for members that are excused and would otherwise be absent from voting. The resolution follows a public hearing last week which was required by section 103-a of the Public Officers Law. Videoconferencing is authorized provided that a quorum of members is physically present.

The Senate will require the Majority Leader to determine applicable excusals, while the Assembly will empower the leaders of each conference to make such determinations for their respective members. This led to some complaints from Senate Republicans, but the Majority Conference contends that this is current procedure in the Senate and deference to the Minority Leader in determining excusals for the minority conference has never been withheld. 

Governor Announces Funding for School Technology and Security Enhancements

The Governor announced the approval of 61 Smart Schools Investment Plans focused on reimagining education and boosting school security. The approved plans, totaling $31.4 million, are part of the $2 billion Smart Schools Bond Act. This was the 19^th meeting of the Smart Schools Review Board.

The plans approved by the Board were submitted by 57 school districts and one special education school. Projects include $16.6 million for high-tech security, $7.2 million for classroom technology, $7.1 million for school connectivity, and $500,000 for nonpublic schools’ classroom technology and school connectivity. A summary of the plans is available here.

Governor Hochul said:

Governor Announces Grants Awarded to Water Quality Protection Projects

The Governor announced that approximately $110 million was awarded to 86 projects through two grant programs to improve water quality across the state. The grant programs support projects that will help protect drinking water, combat contributors to harmful algal blooms, update aging water infrastructure, and improve aquatic habitat in communities statewide.

The $110 million in grants were administered by the New York State Department of Environmental Conservation (DEC), with more than $108 million going to 51 projects through the State’s Water Quality Improvement Project (WQIP) program and nearly $2 million going to 35 projects through the Non-Agricultural Nonpoint Source Planning and Municipal Separate Storm Sewer System Mapping Grant (NPG).

The full list of awardees can be found at www.dec.ny.gov/pubs/4774.html for WQIP and www.dec.ny.gov/pubs/116725.html for NPG.

Governor Hochul said:

Comptroller Releases Executive Budget Report

State Comptroller Tom DiNapoli released his Executive Budget Report which finds that despite the state’s economic recovery since the pandemic, significant headwinds will present challenges to ongoing economic growth and fiscal stability. The state faces prolonged inflation, rising federal interest rates and the end of federal relief aid that was instrumental in balancing the past two budgets.

The Comptroller’s assessment of the Executive Budget identified several economic, revenue and spending risks and other concerns, including the following:

Economic and Revenue Risks

Risks associated with the economic environment include continued inflation, the impact of interest rate hikes and disruptions related to Russia’s invasion of Ukraine. With the Executive Budget Financial Plan forecasting a recession, DOB reduced its projections of tax revenues for the upcoming fiscal year by $2.1 billion and a total of $10.3 billion over the life of the Plan. Should a recession be more severe or be longer in duration, revenues could decline more than currently forecasted. The changes in the labor market are also a risk to the state economy. New York’s job recovery from the pandemic has lagged the nation’s, there are fewer workers in the labor force and the labor force participation rate is among the lowest in the nation.

Structural Balance and Use of Federal Funds

The Executive Budget includes $14.9 billion in SFY 2023-24 resources that the Comptroller’s office identifies as either temporary (more than one year but not permanent) or non-recurring (one year), creating large future budget gaps.

According to the report, there are also significant spending risks. In June 2023, the state will begin redetermining eligibility for all enrollees in Medicaid, the Essential Plan and Child Health Plus programs that are projected to reduce coverage by 10.3% to 8.3 million individuals by April 2024. In the Medicaid program, the Financial Plan projects a decline of almost 888,000 individuals in a single year. If enrollment exceeds current projections, significant unbudgeted costs will occur. For example, if only half of the assumed decline is realized, there could be an additional $6.2 billion in total costs, including $2.2 billion in state costs in SFY 2023-24.

Reserve Funds

The Executive Budget proposal increases the balance of statutory rainy-day reserves to $6.5 billion at the end of the current fiscal year and includes legislation to further increase the maximum annual deposits to 10% of State Operating Funds (SOF) spending and the maximum fund balance to up to 20% of SOF spending. The Comptroller urges lawmakers to support these actions.

Debt Practices

The Executive Budget proposes to continue circumventing the state’s debt cap by utilizing a loophole in the Debt Reform Act for structuring the Gateway Plan debt. The Executive Budget would further reduce transparency and accountability by classifying the Gateway loan in a manner that is inconsistent with past practice and fails the most basic standards of transparency by continuing to not count this debt in projections of any debt outstanding.

The Executive Budget again proposes “backdoor borrowing” authorizations for up to $5 billion in short-term cash flow borrowings during SFY 2023-24 that are redundant to the existing ability to issue more cost-effective Tax and Revenue Anticipation Notes (TRANs). Given the state’s current strong cash balances, it is unclear why this more costly form of borrowing is proposed.

Transparency

The SFY 2023-24 Executive Budget continues a problematic pattern from past budgets that include eliminating the Comptroller’s contract pre-review oversight and waiving competitive bidding requirements for certain contracts, including the proposal related to selection of certain Managed Long Term Care plans. In addition, the budget includes an appropriation that would unduly and inappropriately impair the Office of the State Comptroller’s duty to conduct independent audits of the New York State Health Insurance Program.

Comptroller DiNapoli said: