Plugged In @ Hinman Straub – January 22, 2021

What’s Inside

  • 2021-2022 Executive Budget Released
  • Legislature Releases Budget Hearing Schedule
  • Senate Passes Third Party Delivery Bills
  • Siena College Research Institute Issues New Poll
  • Board of Elections Chief Enforcement Counsel to Retire
  • Political Updates
  • Reminders and Links
  • Coming Up

2021-2022 Executive Budget Released

Governor Andrew M. Cuomo delivered his 2021-2022 Executive Budget address on Tuesday, January 19 in a presentation offered virtually from the State Capitol in Albany.

The 2021-2022 Executive Budget is comprised of a $193 billion budget proposal that closes a projected $15 billion deficit (FY 2021 and FY 2022). Agency operations were reduced by 10% over the course of the year, and the 2021-2022 Executive Budget holds agency spending flat.

Key proposals in the 2021-2022 Executive Budget include:

Deficit

The Governor’s budget proposal is premised on receiving at least $6 billion in federal aid. The Governor called the state’s receipt of $6 billion in federal aid the “worst case scenario.” This amount would be insufficient to close the state’s shortfall, requiring spending reductions and tax hikes as outlined in the Executive Budget. The Governor asserted that if the state instead receives $15 billion in federal assistance, the state would be able to forestall cuts and it would allow for spending on the goals the Governor has advanced for post-pandemic recovery, infrastructure, broadband access, and the environment.

The budget includes a provision that will trigger automatic across-the-board reductions to planned local assistance appropriations and cash disbursements if unrestricted Federal aid is not approved by August 31, 2021 or is approved at an amount less than the amount budgeted in the Financial Plan. The reductions would be calculated to generate savings equal to the difference between the Federal aid assumed in the Financial Plan and the amount approved.

Economic Development

The budget proposal includes funding for an eleventh round of Regional Economic Development Council awards, totaling $750 million. Funding is also included to support the New York Works Economic Development Fund to provide additional statewide capital grants to support projects that facilitate the creation of new jobs or retain existing jobs, or fund infrastructure investments necessary to attract new businesses or expand existing businesses in support of economic recovery.

The Governor also outlined two new economic development programs. The Pathways in Health Care Careers grant program within the Workforce Development Initiative, will allocate $2 million to incentivize new and expanded industry partnerships that train new and existing health care workers for higher-skilled, higher-paying jobs in the health care field. The Governor also announced that he will call on Empire State Development Corporation to create a new $40 million New York State Infectious Diseases Resiliency Commercialization Fund. This fund will be designed to accelerate the growth of companies across New York State and to fast track the development of innovations that address emerging infectious diseases and public health threats. Grants ranging from $500,000 to $1 million will be awarded.

Education

For the 2021-22 school year, (SY) the Executive Budget proposal includes approximately $26.7 billion in traditional school aid, an increase in State support of just over $848 million over 2020-21. This represents flat foundation aid; as well as restoration of the $1.1 billion pandemic adjustment that was included in the 2020-21 enacted budget.

Energy and Telecommunications

The Governor’s proposal included several actions to incentivize and expedite renewable energy development in the state. The proposal also extends the current moratorium on termination of utility service by removing the March 31, 2021 expiration date. The proposal makes the provisions permanent by applying a moratorium on terminations of service during any future declared disaster emergencies.

Environment

The Governor’s proposal includes $300 million for the Environmental Protection Fund, which provides funding for environmental programs such as land acquisition, farmland protection, invasive species prevention and eradication, enhanced recreational access, water quality improvement, and environmental justice. The proposal also includes a $500 million appropriation to support additional investments in clean water projects throughout the State. This appropriation is the third installment of a five-year $2.5 billion program for drinking water and wastewater infrastructure, and water quality protection.

Higher Education

The budget proposal provides $7.5 billion in funding for higher education in New York. The 2021-2022 Executive Budget maintains support for over $1 billion in HESC financial aid programs, including TAP and the Excelsior Scholarship, as well as over $200 million in funding for higher education opportunity programs and training centers. The budget also includes legislation to hold harmless students who were unable to complete academic requirements needed to maintain financial aid eligibility because their enrollment was disrupted by coronavirus.

Human Services

The Governor’s proposal continues the $20 billion, five-year investment in affordable housing, supportive housing and related services. Funding continued in the Executive Budget for affordable housing includes $3.5 billion in capital resources, $8.6 billion in State and Federal tax credits and other allocations, and $8 billion to support the operation of shelters, supportive housing units, and rental subsidies. The budget advances the emergency rental assistance program supported by Federal funds. The program will support households in rental arrears that have experienced financial hardship.

The 2021-2022 Executive Budget also appropriates $25 million to continue programs through the Nourish NY Initiative which provides funding for food banks to purchase goods from New York State farmers and producers.

Labor/Employment

The Governor’s proposal requires public and private employers to provide up to four hours of paid leave for up to two COVID-19 vaccinations for each employee. If the vaccination occurs at the employee’s workplace, the employer only needs to provide sufficient time for an employee to obtain the vaccine.

Infrastructure

The Governor’s proposal supports over $300 billion for a newly expanded, five-year infrastructure plan, which includes:

  • $190 billion for transportation, including mass transit, railroads, airports, highways, bridges, and tunnels across the State.
  • $33 billion for improving environmental facilities and parks, and the development of green energy.
  • $33 billion for economic and community development.
  • $14 billion to further the State’s investment in the construction of high quality, affordable housing for the people of New York.
  • $19 billion to help school districts build new and better school buildings.
  • $17 billion to improve and maintain SUNY and CUNY buildings, State health care facilities, and other capital assets.

Other Notable Provisions

Marijuana Legalization

The Executive Budget proposes to enact the “Cannabis Regulation and Taxation Act,” a regulatory structure for the adult use of marijuana and accompanying tax structure. The proposal would institute state oversight of the production, testing, labeling, distribution, and sale of cannabis, through a new “Office of Cannabis Management.”

Data Privacy

The Governor’s proposal would mandate that companies that collect information on large numbers of New Yorkers disclose the purposes of any data collection and collect only data needed for those purposes.

Covered companies are those that conduct business in New York State or produce products or services that are targeted to residents of New York State and

  1. Control or processes personal information of 100,000 consumers or more OR
  2. Derive over 50% of gross revenue from the sale, control or processing of personal information.

The bill does not apply to:

  • state and local government entities;
  • personal information that is stored in accordance with the Federal Health Insurance Portability and Accountability Act of 1996, the Health Information Technology for Economic and Clinical Health Act, the Gramm-Leach-Bliley Act, or the Driver’s Privacy Protection Act;
  • personal information that maintained for employment records purposes;
  • personal information that is collected, stored or utilized in accordance with the Fair Credit Reporting Act;
  • publicly available information; OR
  • de-identified data.

The bill also creates a Consumer Data Privacy Bill of Rights, and provides outreach and education about these rights. A Consumer Data Privacy Advisory Board is also established to provide guidance and recommendations on matters related to consumer data privacy.

The Secretary of State is provided the power to enforce provisions, investigate potential violations, and assess civil penalties for violations.

Mobile Sports Betting

The Executive Budget proposes to authorize mobile sports wagering by licensed gaming facilities operating a sports book when provided by platform provider(s) selected pursuant to a competitive bidding process conducted by the Gaming Commission. The Executive estimates that the program will generate $500 million in State revenue when fully realized.

Revenue Actions

The Governor’s proposal imposes a temporary income tax surcharge on high-income taxpayers for 2021 through 2023. The bill allows those taxpayers to pre-pay these surcharge liabilities in 2021, and allows a deduction beginning in 2024 for any prepayment.

The Governor’s proposal also delays the phase-in of the middle class personal income tax rate cuts for one year.

Next Steps

Under New York’s budget-making process, the Governor develops and proposes to the Legislature a comprehensive and balanced budget proposal – the 2021-2022 Executive Budget proposal issued January 19.  The Governor is then afforded two opportunities to amend his initial proposal. The first opportunity to amend is on the 21st day after initial submission and the final opportunity to on the 30th day after initial submission. In recent years, the Governor has infrequently issued 21 day amendments and has focused all amendments on the 30 day submission.

Over the next several weeks, the Assembly and Senate will conduct joint hearings on the proposal – by agency and issue area – and negotiations with the Governor usually commence directly after each house submits their own one house budget proposals. Joint budget hearings are scheduled to commence on January 26.

The 2021-2022 fiscal year begins April 1, 2021.

Legislature Releases Budget Hearing Schedule

The legislature released its budget hearing schedule which will begin next week. The legislative budget hearings focus on an array of programmatic areas and allow for public input. Budget hearings will be done virtually using web-based video conferencing. Those wishing to testify must submit a hearing request form no later than the close of business 48 hours prior to the respective hearing, and should have written testimony available upon testifying. Verbal testimony should be limited to a three minute summary of key points included in written testimony.

The hearing dates and times are as follows:

Transportation

Tuesday, January 26 – 9:30 A.M. (Direct requests to testify to Assembly)

Environmental Conservation

Wednesday, January 27 – 9:30 A.M. (Direct requests to testify to Senate)

Elementary Education

Thursday, January 28 – 9:30 A.M. (Direct requests to testify to Assembly)

Housing

Tuesday, February 2 – 9:30 A.M. (Direct requests to testify to Assembly)

Workforce

Tuesday, February 2 – 1:00 P.M. (Direct requests to testify to Senate)

Health

Wednesday, February 3 – 9:30 A.M. (Direct requests to testify to Senate)

Higher Education

Thursday, February 4 – 9:30 A.M. (Direct requests to testify to Assembly)

Mental Hygiene

Friday, February 5 – 9:30 A.M. (Direct requests to testify to Senate)

Human Services

Tuesday, February 9 – 9:30 A.M. (Direct requests to testify to Assembly)

Public Protection

Wednesday, February 10 – 9:30 A.M. (Direct requests to testify to Senate)

Local Government

Thursday, February 11 – 9:30 A.M. (Direct requests to testify to Assembly)

Economic Development

Tuesday, February 23 – 9:30 A.M. (Direct requests to testify to Senate)

Taxes

Tuesday, February 23 – 1:00 P.M. (Direct requests to testify to Assembly

Senate Passes Third Party Delivery Legislation

The State Senate passed two bills this week aimed at changing how restaurants work with third party delivery apps like Grubhub and Doordash. The first bill (S.1554-B Kavanagh) would cap the amount a third part delivery service can charge a restaurant at no more than 15% of the total order amount. The bill also caps any other fees at 5% for other services provided by the app, like prioritization and search engine optimization. The bill provides civil penalties up to $1,000 per violation. If passed by the Assembly and signed by the Governor, this bill would take effect immediately and expire sixty days after the termination of the disaster emergency declared by Executive Order 202.

The second bill (S.1630-A Savino) would require a written agreement between a restaurant and a third party delivery service before the delivery app would be allowed to offer or advertise a restaurant’s products on their platform. The bill provides civil penalties up to $1,000 per violation. If passed by the Assembly and signed by the Governor, this bill would take effect on sixtieth day.

Senator Diane Savino said:

“The third-party food delivery platforms and restaurants are providing a valuable service to consumers which has become essential during the ongoing pandemic. While consumers want this convenience, restaurants should have control over their product and how it is advertised, sold, and delivered. In food service, this is particularly important from a food-safety and sanitation standpoint.”

Siena College Research Institute Issues New Poll

Siena College Research Institute released a poll this week measuring approval numbers for elected officials as well as support and opposition for notable budget proposals. The poll also asked voters to rank their top priorities for this legislative session.

The poll also asked respondents to weigh in on a couple of specific proposals contained in the Executive Budget. The legalization of recreational marijuana receives majority support, though not as high approval as it did this time last year. Mobile sports wagering receives a plurality of support and although support does not register as high as recreational marijuana, it does enjoy more broad and bipartisan support.

Governor Cuomo still enjoys a high approval rating, however, the numbers appear less favorable when measuring whether a voter would vote to re-elect the Governor.

Board of Elections Chief Enforcement Counsel to Retire

Risa Sugarman, chief enforcement counsel for the state Board of Elections’ independent enforcement division, announced her retirement effective January 25th. Sugarman has been the only person to hold this position. Sugarman has been occupying the position in holdover status since her initial 5 year term expired in 2019. In order for her to be replaced, the Governor would need to appoint a new chief counsel and the Assembly and Senate would need to confirm the appointment.

Political Updates

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