Voters would have less hassle registering under AVR (photo: Michael Appleton/Mayor's Office)
Following the widespread problems in the execution of this year’s elections, it’s clear we need to transform New York’s voting systems from top to bottom. From restoring confidence in the Board of Elections to reducing long lines and wait times counting ballots, lawmakers must take action now to prevent another disaster the next time New Yorkers vote. Thankfully, there is one important fix that can be done immediately: enacting the Automatic Voter Registration legislation that passed the Legislature and is currently awaiting Governor Cuomo’s signature.
There’s no question that 2020 has been an extraordinary year for democracy – and the COVID-19 pandemic presented serious challenges for election administration across the country and here in New York. And while there were record shattering levels of enthusiasm among voters this year, our state continues to fall short. According to a Kaiser Family Foundation report, New York ranks 45th in the nation for registered voters as a percentage of the population. Indeed, there are up to 1 million New Yorkers who are eligible to vote, but remain unregistered.
The best way to ensure that we never have to let the burdens of the registration process lead to low turnout and other complications at the polls is to enact Automatic Voter Registration.
Automatic Voter Registration (AVR) is a simple, secure, and straightforward tool that will immediately increase New York’s abysmal registration rates. Through AVR, eligible voters become automatically registered when they engage with government agencies like the Department of Labor, Department of Motor Vehicles, or a Medicaid enrollment office, provided they do not opt out. The AVR system would then securely transmit the voter’s registration information from those agencies to the State Board of Elections. Had this policy been in effect in 2020, eligible unenrolled New Yorkers filing for jobless claims with the Department of Labor could have been added to the voter rolls automatically.
New York’s democracy problems pre-date the coronavirus. In 2018, New York ranked 42nd in the nation in voter turnout, and experts believe that this one simple reform is a key to reversing our shockingly low level of electoral engagement. Sixteen states and the District of Columbia have passed AVR, including New Jersey, Massachusetts, and Vermont just across our borders. Many of these states tore down obstacles to voter participation with bipartisan legislative majorities or through ballot measures that decisively won with broad support from the public.
The lessons from Oregon are particularly instructive. Since it became the first state in the country to implement Automatic Voter Registration, Oregon’s voter registration rates quadrupled at DMV locations across the state. Indeed, over 90% of eligible voters are now registered. Not only are these newly-registered individuals on the voter rolls, they are actually voting as well. A report found that 44% of these previously unregistered individuals voted in the elections following AVR implementation. And in 2018, Oregon far exceeded the national turnout average with one of the highest rates in the country.
Unquestionably, last year was a banner year for voting reforms in New York State. With full Democratic control of the Legislature in Albany, it was the first time in memory that laws were passed to make voting more accessible to New Yorkers. The bottlenecked backlog of reforms that included early voting, pre-registration of 16 and 17-year-olds, consolidation of primary dates, and flexibility to change party affiliation helped transform New York away from its status as a state with some of the most arcane and restrictive voting policies.
However, despite this progress, there is still unfinished business as the election made abundantly clear. And AVR is at the top of that list.
We have an opportunity to modernize our state’s broken election system with one of the most popular and common-sense reforms available, one that will enhance registration in particular for underrepresented populations that are too often missed. We simply can’t afford to wait any longer, it’s time for Governor Cuomo to sign Automatic Voter Registration into law now.
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State Senator Michael Gianaris (D-Queens) and Assemblymember Latrice Walker (D-Brooklyn) are the lead sponsors of the Automatic Voter Registration bill. On Twitter @SenGianaris and @TheRealLatriceW.
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Governor Cuomo at an MTA train depot (photo: governor's office)
New York’s Metropolitan Transportation Authority (MTA) is facing the largest fiscal crisis in its history due to COVID-19. With more federal aid not forthcoming, the MTA has been buying time – quite literally, by borrowing up to $2.9 billion from the Federal Reserve – before the axe will need to fall on service and its workforce. The MTA’s Chief Financial Officer, Bob Foran, said that layoffs would need to start in May of 2021, and fare and toll increase hearings start this month. The MTA Board could vote on fare and toll increases as soon as February 2021.
Unfortunately, the public and many of New York’s elected leaders still have not fully grasped the magnitude of the MTA’s potential “worst case scenario” losses: $23 billion from 2020 to 2024 according to the latest budget numbers. This is partly because the MTA’s November Financial Plan does not clearly show the worst-case possibilities to the public and MTA Board, but rather emphasizes this period’s mid-point $16 billion deficit – still a debilitating sum.
A cumulative deficit of $23 billion is a massive amount: the equivalent of 15 months of pre-pandemic operating costs for the MTA. For comparison, the New York City Department of Education has a budget of $34 billion for the 2020-2021 school year to educate more than 1 million students.
When factoring in a worst-case scenario “adjustment,” the MTA’s deficit through 2024 balloons to nearly $23 billion, up from $16 billion, as shown in the chart below, an increase of $7 billion and 44% worse.
The MTA’s worst-case scenario “adjustment” assumes more depressed ridership than anticipated, and a significant “second wave” of COVID-19 accompanied by more lockdowns this winter, according to an updated analysis from McKinsey. In the worst case, McKinsey assumes an average “ridership recovery” of 27% for 2021, 54% for 2022, 71% for 2023, and 79% for 2024.
This means that the worst case would be only 27% of ridership coming back in 2021 compared to what the MTA had projected pre-pandemic. It is worth noting that these recovery rates are not pegged to 2019 ridership rates, which saw steady ridership gains that were expected to continue through 2024. The MTA/McKinsey assumption shows relatively larger revenue deficits than if 2019 were held as a “base” year for ridership, and therefore for fare revenue, based on expected growth. However, steadily increasing MTA ridership is certainly a positive goal for the agency and the New York City region as a whole, albeit one that may be harder to attain post-covid.
Overall, McKinsey predicts a reduction in ridership due to the following factors: remote work (-4% to -12%); reduced non-work trips like shopping or for tourism (-2% to -5%); mode shifts such as walking, bicycling, driving, etc. (-2% to -3%); and decreased employment (-.2%).
MTA’s November Doomsday Plan Doesn’t Close Either a $16B or $23B Deficit
The MTA’s August Doomsday plan showed a number of options to close the gaps, as seen in our prior analysis, which also showed a $1 billion gap even with brutal cuts. The MTA’s November plan repeats many of these bad options to close the gaps in the absence of federal aid and greater support from New York State. Together, these gap-closers make up $14 billion of the MTA’s $16-$23 billion deficit, and include borrowing that will need to be paid back.
This means that at least $2 billion more in cuts will be needed, and as much as $9 billion in a worst-case scenario. Our summary of the MTA’s latest budget gap-closing options is below. It includes the MTA using its Other Post-Employment Benefits (OPEB) trust, which was intended to help pay future MTA retirement benefits, and borrowing $2.9 billion from the Federal Reserve’s Municipal Liquidity Facility (MLF) program, which will require the MTA to start paying interest in 2023.
Fare Hikes
In August, the MTA hinted at possible fare hikes beyond the regular increases planned every other year, for an additional 1% above the planned 4% increase. While the MTA’s November Financial Plan shows only 4% increases as originally planned pre-covid (as included in the chart above), some MTA Board members loyal to the governor have indicated that there should be no increases, or new discounts to lure riders back. No one will dispute that fare policies should consider the impact on ridership, as who wants to pay more for much, much less? Higher fares could deter riders from coming back, and 2019’s ridership gains already seem a distant memory.
The problem here is that the only solutions being proposed by Governor Cuomo and his MTA are cuts, borrowing, discounts on fares, or holding the fare steady. At best, discounts and holding the fare at current levels will have a neutral impact on the MTA’s bottom line, if not further increasing the deficit. The proposed fare hikes were expected to net $148 million more in revenue for 2021, and $267 million more in 2022.
MTA is Planning on the State Raiding Its Dedicated Funds
Even worse, the governor is actively withholding from the MTA its dedicated funds as part of the state’s budget adjustment process, with 20% across-the-board cuts being inflicted on everything from the MTA to nonprofit service-providers, CUNY, and other vital institutions. Funds have been withheld for months now, and are becoming de facto cuts in the absence of formal cuts. The withheld funds have allowed the state to accumulate a cash hoard of $23.8 billion – 62% more than this time last year, according to the latest cash reports from the State Comptroller. This is nearly the same amount as the MTA’s worst-case deficit through 2024: $22.9 billion.
The MTA has acknowledged that $600 million in state subsidies are at risk if the federal government doesn’t provide emergency aid to New York State, even factoring this loss into its $12 billion ask for federal aid. Translated from Albany budget lingo into real-world terms, the state plans to raid $600 million in MTA dedicated taxes to prop up its own finances.
Congress and Governor Cuomo Both Have a Role to Play
So where are the solutions? Everyone agrees that the federal government is the MTA’s best option. Congress provided the MTA with nearly $4 billion in CARES Act funds earlier this year, which was fully spent down this summer. And the Federal Reserve’s Municipal Liquidity program is going to give the MTA $2.9 billion more in liquidity to help it make up some of these gaps. But any borrowing needs to be paid back, and the MTA will start paying $143 million a year in interest on this loan, according to its November Financial Plan.
The MTA’s “worst case” $22.9 billion deficit also happens to be nearly the same size as the ‘deficit’ New York has with the federal government. The MTA is essential to boosting the region’s economy, and State Comptroller Tom DiNapoli’s recent report shows that New York’s economic successes allowed it to send $23.7 billion more to Washington D.C. than it got back in federal aid in 2019. New York State ranked second worst only to New Jersey for what it got in return for its tax contributions. Forty-four other states got more back than they sent to the federal government; New Mexico, for example, got back nearly $12 billion more than it paid in taxes.
Now is the time for New York’s Congressional delegation to hold firm and ensure that the MTA is a necessary part of any emergency aid package. The latest aid proposal being discussed is yet again an anemic package that fails to fully support the MTA, which carries 40% of transit riders nationwide. The nation depends on New York to bolster federal tax revenue, and if the federal government lets the MTA fail, it only hurts itself.
At the same time, Governor Cuomo must once and for all pledge to stop raiding the MTA’s dedicated taxes to prop up the state’s budget shortfalls. The governor controls the MTA, and his own Board members have a fiduciary duty to the agency (including his Budget Director Rob Mujica), yet that is far from evident given that the State Division of the Budget is withholding millions from the MTA. It’s time they respect MTA dedicated funds – which were created by the Legislature to provide the MTA stable revenue in good times and bad – by giving them to the MTA at its time of greatest need.
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Rachael Fauss is Senior Policy Analyst at Reinvent Albany. On Twitter @RachaelFauss & @ReinventAlbany.
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Mayor de Blasio (photo: Michael Appleton/Mayoral Photography)
As required by the state Financial Control Act, last Monday Mayor de Blasio presented a modification of New York City’s current fiscal year budget and four-year financial plan. This “first quarter mod” is usually a no-drama, technical adjustment that makes few substantive changes to the budget adopted at the start of the fiscal year in July. It incorporates changes in revenue projections based on receipts actually received through September and any unanticipated adjustments in expenses (usually increases). But this has been anything but a usual year, and a more urgent tone and more aggressive budget changes were called for and not delivered.
Budget watchers hoped that the new budget documents would present a more realistic picture of the serious fiscal situation the city faces and the concrete steps the de Blasio administration will take to address it. Covid continues to wreak havoc on the city’s residents and its economy. Despite the expected arrival of a vaccine in the next few months, it is far from certain that things will bounce back and tax revenue will quickly return to pre-covid levels. Even during prior (”normal”) recessions, it has taken three years for the city’s economy to recover, and this recession is not normal.
Tourism, commercial real estate transactions, entertainment, and other activities may well take years to rebound and/or may undergo permanent changes and retrenchment. How will the city adjust its revenue and spending over the next four years to respond to these changes over an extended period of time? This budget modification doesn’t tell us.
We know that in addition to further income, business, and real estate tax revenue losses, the city could also face severe cuts in state aid because the state is in even worse financial shape, but that is not reflected in the budget either. One billion dollars in state school aid to the city has already been removed from the state’s baseline budget for fiscal year 2022. In addition there is potentially $8 billion in unspecified statewide local aid cuts that could mean a loss of $2-3 billion to New York City. Instead, the city’s new budget mod relies on debt service savings (which are routine, not the result of new, affirmative steps by the city government), minimal efficiencies, and largely symbolic, non-recurring measures like short furloughs of management employees and postponements of payments to public employees (laughably characterized as “savings”) to balance this year’s budget and reduce the 2022 budget deficit by $400 million to $3.8 billion.
According to Mayor de Blasio, the strategy is to ‘hang on’ because sometime soon, there will be an infusion of federal stimulus funds which will close both the city and state gaps:
“….first of all, we need relief immediately to be able to continue to provide city services and to be able to keep people employed…We do not want to reduce services exactly when we're trying to come back and when people are in such dire need. So, this was a way of getting us to next year. But we've said all along, the only way we can actually make all of this come together is with the stimulus…And the federal government was supposed to protect us. Obviously, that didn't happen…So, for us to just keep hanging on is the right approach to get to the day where there's actually the federal support we deserve and which I absolutely believe is within reach.”
But federal aid to states and localities is far from certain. Hopes for imminent help were first focused on the post-election Congressional session, which will likely end by mid-December. There is discussion of a last-minute stimulus deal before Congress recesses in the next few weeks but Republican Senate recalcitrance makes adequate help for state and local governments unlikely, even though a number of ‘red’ states are in financial trouble as well as 'blue' ones.
The mayor’s preliminary budget for next fiscal year must be submitted to the City Council in January. Will President-Elect Biden be able to deliver any more state and local aid than is possible in the current Congress? Not necessarily. And if making that determination takes until February, or even later, is Mayor de Blasio going to ‘hang on’ even longer without taking any steps to solve our fiscal problems? Delaying the start of gap-closing measures will only make the problem and the necessary solutions more painful.
Federal funding to assist the city and other jurisdictions that faced economic shutdowns because of the pandemic is unquestionably necessary and appropriate, but whatever amount is authorized — if any — will unlikely be sufficient to cover the full New York City deficit and will not last for more than one or two years. As Citizens Budget Commission President Andrew Rein has said, federal stimulus will only be a bridge to a more sustainable future; the City and State will face continuing budget gaps if the economy doesn’t fully recover by 2023. So, what’s the plan?
The MTA and Port Authority, also struggling with dramatically-reduced revenue, have presented budget plans showing how they will survive without federal aid. The prospects of reduced transportation service are daunting indeed, but the public needs to understand them and be prepared if these difficult scenarios come to pass. Governor Cuomo has temporarily withheld substantial state aid payments to localities and cut back agency spending, warning that these cuts and more could become permanent. Mayor de Blasio prefers to avoid proactively making tough decisions that will make New Yorkers unhappy, but the uncertainty is already causing distress and there will be anger if New Yorkers feel they were misled to believe that federal aid would make everything better and they are confronted with service cuts, layoffs, tax increases, or a combination of all of these at the very last minute.
If the administration will not present a specific plan for multi-year gap closing then the Financial Control Board (FCB) should require that it do so. It is the FCB that requires the city to maintain a balanced budget, prepare a four-year financial plan, keep it updated, and demonstrate the fiscal discipline to maintain long-term fiscal stability. At the FCB meeting in August the Executive Director suggested that because of the unique circumstances wrought by covid it would be appropriate to hold another session in November to review the budget modification. But it is December and it doesn’t appear that such a meeting has yet been scheduled and the Executive Director of the FCB retired in mid-October; no replacement has been announced. It is critical that the FCB adopt a more assertive strategy to assure there is clarity about how state aid cuts will impact the city and hold the mayor accountable for a real fiscal management plan.
Moreover, if the mayor is going to ‘hang on,’ he will be leaving his successor to confront revenue shortfalls along with the larger issues of how to get the economy back on track. When he took office the mayor complained that his predecessor left him with a raft of unresolved labor contracts. What he seems to be ready to leave his successor is much worse. The media and voters should start asking mayoral candidates what their plans are for closing our budget gaps if federal funds do not make our fiscal challenges go away. The sooner we hear from them about this crucial issue, the better.
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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018. Norman Steisel was a First Deputy Mayor of New York City, Sanitation Commissioner, and First Deputy Budget Director, all between 1974 and 1994.
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