The Senate and Assembly released their own budget proposals this week, taking positions on the Governor’s proposal and highlighting their own priorities. Over the course of the next two weeks, the three sides will negotiate toward a final budget deal, with an April 1^st deadline as the target. Both houses are proposing to spend significantly more than the Governor proposed. Highlights of each proposal included below:

Assembly One House

The Assembly proposes an All Funds budget of $232.9 billion for State Fiscal Year (SFY) 2023-24, which is $5.9 billion or 2.6 percent over the Executive proposal. This is largely attributed to $2.1 billion in restorations of the Executive proposed actions in Medicaid; and commitments to School Aid, Higher Education, Housing, Medicaid, a human services Cost of Living Adjustment, Indigent legal representation, aid to local governments, and various programs.

Highlights include:

Housing

The Assembly budget includes a proposed $1.5 billion to assist tenants with arrears and provide homeowner assistance. It would also create the Housing Access Voucher Program to provide rental assistance to those facing the risk of homelessness, as well as the Homeownership Opportunity Connection Program to connect residents of communities with below average homeownership rates and not-for-profit housing organizations with homeownership programs. The spending plan would also incentivize the development of new housing, rather than require it, in municipalities across the state and includes $125 million in incentives for New York City and $500 million for other cities, towns and villages.

Higher Education

The Assembly’s spending plan makes investments that prevent tuition increases at the SUNY and CUNY schools and raises the Tuition Assistance Program (TAP) income threshold limit from $80,000 to $100,000. The spending plan also restores $6 million and adds an additional $10.2 million for opportunity programs for a total of $213 million.

Education

The Assembly one-house budget would provide $34.3 billion in funding to General Support for Public Schools (GSPS), an increase of $3 billion or 9.7 percent, over the 2022-23 school year (SY). The spending plan accepts the Governor’s proposal of $2.6 billion to fully fund Foundation Aid for the first time since the formula was created in 2007. The proposal also includes $280 million in funding to make school meals free for all students in the state. The Assembly intentionally omits the Governor’s proposal to lift the charter cap.

Child Care

The proposed Assembly budget for SFY 2023-24 includes an additional $137.5 million over the allocated amount for the second year of the four-year child care spending plan.

Transportation

The Assembly’s budget includes $8.3 billion funding for the MTA, including $196.9 million to eliminate a proposed 5.5 percent fare increase. The proposed budget also includes $50 million for a zero-fare bus pilot program. The spending plan also includes $1.33 billion for capital aid to localities programs to maintain and repair aging infrastructure, including CHIPs, Pave our Potholes, Bridge N.Y., Extreme Weather Recovery and State Route NY. It also includes an increase of $100 million from the executive’s proposal for the Pave N.Y. program.

Health

The proposed spending plan would add $2.7 billion in funding to the Medicaid Program and $110 million in funding for public health. The plan also includes $850 million in additional funding for financially distressed hospitals and calls for the expansion of coverage for undocumented immigrants through the Essential Plan.

Minimum Wage Increase

In this year’s budget, the Assembly Majority intentionally omitted the Governor’s proposal to index the minimum wage to inflation but supported the position in their resolution by saying the Assembly “is committed to raising the minimum wage to address the rising costs of living, and indexing the minimum wage. The indexing should not be subject to exceptions which would prevent employees from getting an annual increase and diminish the value of the minimum wage rate. Additionally, the wage rate for home care workers must remain at least $3 above the minimum wage rate so it may rise jointly with the rest of the state.”

Energy

The Assembly’s proposed budget would implement an all-electric building provisions for new construction, which would prohibit the installation of building systems or equipment used for the combustion of fossil fuels in new smaller building construction beginning in 2025 and new larger building construction in 2028. The proposal also invests $200 million each for two energy programs aimed at increasing affordability. The Assembly intentionally omits the Governor’s proposal to authorize NYPA to own renewable energy projects but signified support generally in their resolution by saying the Assembly “remains committed to developing a plan to require any renewable energy project built, financed or operated by the New York Power Authority (NYPA) to:

• fill energy generation gaps identified by NYPA’s assessment of the state’s progress towards achieving the energy goals of the Climate Leadership and Community Protection Act (CLCPA) annually;
• include strong labor standards and protections, Buy American requirements, and workforce development programs to train, retrain and transition the fossil-fuel workforce; and
• provide low- and moderate-income consumers, and consumers living in disadvantaged communities with financial protections during the transition to renewable energy, including providing utility bill credits.

Environment

The Assembly budget increases funding for the Environmental Protection Fund (EPF) by $35 million for a total allocation of $435 million, and allocates $600 million to support clean water initiatives.

Senate One House

The Senate proposes an All Funds budget of $236 billion for State Fiscal Year (SFY) 2023-24,

which is $9 billion over the Executive proposal. This is largely attributed to restorations of the Executive proposed actions in Medicaid; and commitments to School Aid, Higher Education, Housing, Medicaid, a human services Cost of Living Adjustment, aid to local governments, and various programs.

Highlights include:

Housing

The Senate modifies the Executive proposal to set housing growth targets by removing mandatory requirements and overrides of local zoning, doubling total available incentives for smart growth to $500 million in State assistance, supporting the creation of a land use advisory council to review municipal growth over the next three years, and awarding the $500 million in incentives to municipalities that achieve target goals.

Higher Education

The Senate increases SUNY Aid to Localities funding by $36.7 million and Capital Projects funding by $160 million and provides an additional $151 million for SUNY operating aid. The Senate increases CUNY Aid to Localities funding by $12.1 million and Capital Projects funding by $ 439 million and provides an additional $149 million for CUNY operating aid, $333 million for a CUNY Matching Endowment, and $13 million for the elimination of graduate student fees. The Senate also increases the maximum TAP eligibility income cap from $80,000 to $110,000 and rejects the Executive proposal to authorize tuition increases at SUNY and CUNY.

Education

The Senate accepts the Governor’s proposal to fully fund foundation aid and increases Education Department Aid to Localities funding by $968 million for a total of $44.1 billion which includes:

• $280 million for universal school meals
• $125 million to increase the minimum reimbursement for UPK
• $105 million for community school funding formula
• $150 million reflecting the February database update
• $36 million for the prior-year aid queue
• $35 million for BOCES CTE salary increase
• $3.5 million for Bundy Aid
• $7 million for library operating aid
• $10 million for 4201 Teachers
• $5.8 million for 4201 schools’ general assistance

Child Care

The Senate proposed an additional $623 million to expand child care eligibility up to 103 percent of median income and provides $500 million for bonuses to child care workers through the Workforce Retention Grant Program.

Transportation

The Senate proposal increases CHIPS funding by $200 million for a total of $738.1 million, provides an additional $2 billion per year for four years for the State Road and Bridge Program, increases Bridge NY funding by $50 million for a total of $250 million, and increases Extreme Winter Recovery by $70 million for a total of $150 million.

Health 

The Senate proposal restores the $625 million Enhanced Federal Medicaid Assistance Percentage (eFMAP) pass through payment intercept. The proposal provides a combined total rate increase of $570 million for both hospital and nursing home Medicaid reimbursement by 10 percent, up from the Executive proposed 5 percent. The Senate includes $1 billion in funding for distressed and safety net hospitals and includes language that would create a methodology for allocating such funds and adds $200 million to support the Statewide Health Care Facility Transformation Program V.

Minimum Wage Increase

The Senate intentionally omits the Governor’s proposal to index the minimum wage to inflation but includes the following language in their resolution; “The Senate supports raising the minimum wage and then indexing the minimum wage to inflation after a sufficient increase to ensure that New Yorkers earn a living wage to support their basic needs and the needs of their families.”

Energy

The Senate proposal modifies the Governor’s Cap and Invest program by adding specific programmatic details regarding issuance and allocation of allowances, labor standards and protections, and protections for disadvantaged communities, as well as by setting up the Climate and Community Protection Fund to ensure all benefits and rebates from the program are equitably distributed. The Senate also modifies the Governor’s proposed ban on fossil fuels in buildings by applying the ban to only new buildings. The Senate also advances a new proposal to establish a Climate Change Recover Program which would require fossil fuel companies in the state to pay $75 billion over a 25-year period for their share of total greenhouse gas emissions during the years of 2000 to 2018.

Environment

The Senate proposes to increase the Environmental Protection Fund to $500 million and includes the Senate version of the Extended Producer Responsibility program.

DFS Seizes Signature Bank

The Department of Financial Services (DFS) took possession of Signature Bank this week, pursuant to Section 606 of New York Banking Law, and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Signature Bank is a New York state-chartered commercial bank and was FDIC-insured, with total assets of approximately $110.36 billion and total deposits of approximately $88.59 billion as of December 31, 2022.

To protect depositors, the FDIC transferred all the deposits and substantially all of the assets of Signature Bank to Signature Bridge Bank, N.A., a full-service bank that will be operated by the FDIC as it markets the institution to potential bidders.

The transfer of all the deposits was completed under the systemic risk exception which provides an exception to federal law that otherwise would require the FDIC to resolve a bank failure at the lowest cost to the Government’s deposit insurance fund. All depositors of the institution will be made whole. No losses will be borne by the taxpayers. Shareholders and certain unsecured debt holders, however, will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund (DIF) to support uninsured depositors will be recovered by a special assessment on banks.

According to reports, the decision to seize Signature Bank followed a surge in customer withdrawals on Friday that totaled about 20% of the company’s deposits. Former congressman Barney Frank, who sits on the bank’s board of directors, disputed DFS claims and said it was his understanding that deposit outflows had stabilized as of Sunday morning. But DFS described “significant withdrawal requests still pending and mounting” through the weekend necessitating the move.

Comptroller: Federal Data Demonstrates New York’s Learning Losses Are Double National Average

Comptroller DiNapoli released a review of recent federal data about how the pandemic negatively affected student performance in New York. According to the Comptroller’s review, recent data shows student performance dropped significantly in 2022 from 2019. New York’s average score remained steady for eighth grade reading but declined in eighth grade math (down 6 points). Over this time, New York’s losses in fourth grade math and reading scores were double the national average and exceeded 45 other states in math and 38 other states in reading. The average drop for fourth grade math scores (10 points) was so severe that McKinsey & Company estimated this learning loss to be the equivalent of nearly an entire school year.

Over the same time frame, fourth grade math proficiency rates declined across all gender, racial and ethnic groups, and the decline was steepest for Asian and Pacific Islander students, at 14 percentage points. Students from low-income households also experienced steep declines in fourth grade math proficiency rates from 24% to 18%.

The Comptroller urges the State Education Department to provide school districts with guidance on best practices for spending of remaining federal funds and encouraged school districts to ensure funds are being used for evidence-based practices for students most in need.

The Comptroller said:

Madison Square Garden Sues State Liquor Authority