Gov. Hochul talks housing (photo: Kevin P. Coughlin/Governor's Office)
Governor Kathy Hochul is attempting a major course correction in New York’s approach to housing creation in this year’s state budget and the stakes couldn’t be higher. For the governor, weakened after a tighter-than-expected election that won her a first full-term, it could be a major legacy-making achievement even if its effects aren’t felt immediately. And for New Yorkers, it could be the first meaningful step towards truly easing the state’s acute housing shortage and reducing the atmospheric cost of housing in the state.
Though it faces some opposition in the Legislature, Hochul’s focus on housing supply also meets legislators’ prioritization of tenant protections, laying the ground for a potentially seismic compromise that incorporates significant elements of both.
“A lot is at stake," said Rachel Fee, executive director of the New York Housing Conference (NYHC), a nonprofit advocacy group. "This is a framework for housing supply, which is the core issue impacting housing affordability in New York,” referring to Hochul ambitious plan.
In the decade before the pandemic, New York State created more than 1.2 million jobs but only about 403,000 units of housing. Housing production in the state lags far behind many other jurisdictions. New York City, for instance, created only 27 new homes for every 1,000 residents between 2011-2020, a slower rate than many major cities including Los Angeles, San Francisco, Washington D.C., Miami, Seattle, and Austin. New York’s suburbs are even worse, with the lowest rates of new housing permitted between 2010 and 2018 compared to suburbs in Massachusetts, Connecticut, Southern California, New Jersey, Pennsylvania, and Northern Virginia.
Hochul has proposed a “Housing Compact” designed to fulfill the state’s need for 800,000 homes across the state in the next ten years. It involves three major elements – requirements for regional and local housing growth (3% in each locality downstate and 1% upstate over three years) along with enforcement mechanisms; and major rezonings around MTA transportation hubs to encourage more housing density near mass transit.
Third, the plan also includes easing environmental review regulations that have often slowed housing development, a property tax exemption for localities that allow accessory dwelling units, and several proposals specific to New York City including eliminating the floor-area ratio (FAR) cap in the city to allow more dense buildings, allowing conversions of underused office space to housing (along with a proposed tax credit to encourage set asides for affordable units in those developments), and allowing the city to provide amnesty to existing basement apartments as well as a pathway toward safe, legalized units.
To support localities in their housing efforts, Hochul also allocated in her budget proposal $250 million for an infrastructure fund and $20 million for planning and technical assistance.
“I'm leaning hard into this idea of building more housing simply because other states are far ahead of us,” Hochul said in the city of Cohoes last month. “We're losing people to our neighboring states because they have more supply, therefore the prices are cheaper. Again, it's real simple economics here. So that's what I'm focusing on. I'm supporting communities that have their own vision. I'm encouraging others who don't have the same vision to understand that this is a matter of survival. Building more housing and creating housing - all levels of housing.”
“I want people 150 years from now to look back and say, ‘What we did in 2023, investing in these communities, building the housing people need, was a catalyst for a future, which was absolutely unstoppable,’" she added.
Though some believe they could be doing more, the governor and her team have made significant efforts to raise support for the Housing Compact since she first announced it in her State of the State speech in January. The governor held roundtables on the housing crisis in every region of the state, and she has touted the Compact, and local support for it, in Syracuse, Albany, Rochester, Rye Brook, Patchogue, and White Plains, the governor’s office said.
RuthAnne Visnauskas, the Hochul-appointed state housing commissioner who helped craft the Compact, has also held 75 meetings on the issue with state lawmakers, mayors, town supervisors, county executives and community groups, according to the governor's office. More than 100 organizations and nonprofit groups have announced support of the Compact.
A Slingshot Strategies poll, commissioned by the pro-development group Open New York and released March 1, found that 64% of registered voters support the governor’s overall housing agenda, which also had 66% in support in Westchester and Putnam Counties — two of the key suburban battleground areas where the push for more housing can be particularly fraught.
A Siena College poll released March 27 found that 90% of New Yorkers said that affordable housing is a serious problem in the state, coming in close behind the 92% who said the same about crime. Nearly half, 45% of voters, supported the housing target mandates proposed by Hochul while 37% opposed them. Support and opposition were also split along party lines – 67% of Democrats support the idea while 63% of Republicans oppose it.
The Democratic majorities in the State Senate and Assembly, however, did not embrace it – in their one-house budgets, both chambers instead proposed voluntary growth targets with $500 million in incentives for localities through infrastructure funding. Both Democrats and Republicans have pushed back against the proposal’s enforcement mechanism, which would override local control over housing and zoning.
While promoting the Compact on Long Island last month, Hochul said that building more homes is essential to ensure that the state’s economy can keep growing and that people can find an affordable place to live throughout the state. “We've created so many more jobs than ever before, but we've not kept pace with building the housing,” she said. “And communities large and small all have a capacity to just grow a little bit more. Some want to grow big; some want to keep their small character. I understand that and they should. But we have to open up the doors so we can get people to be able to live here."
“I think [the Housing Compact] was one of the most bold and courageous proposals that she had this session,” said Neal Kwatra, founder of Metropolitan Public Strategies, a consulting firm. Kwatra said that the governor’s plan was naturally bound to receive some opposition as she attempts to deal with an intractable issue, but he has “honestly been really troubled” by the response to the governor’s plan from her own party.
He also noted that while a majority of Republican voters have rejected the governor’s plan, Democratic voters are on board. “If Democrats stuck together, this is a no-brainer because there is widespread statewide Democratic Party primary voter support. There is independent voter support for this concept,” he said.
“I don't want to be hyperbolic about it but this to me is not dissimilar to fights we've had throughout this country's history, on issues like bussing, on school desegregation,” Kwatra added, echoing those who see Hochul’s plan in part as an opportunity to advance fair housing goals. “Anytime we decide to bring more people to the party, namely all of society, all of our citizens, we have this kind of tension.”
Housing experts and advocates say that the Housing Compact could be a historic reset to housing policy in the state with the appropriate eye on the future, but that it can only work if there are growth mandates in place. Exclusionary places unfavorable to change, they point out, are not going to be easily swayed by the offerings of infrastructure funding to accompany new housing that current homeowners do not welcome.
As Visnauskas and others have said, New York took lessons from other jurisdictions where an incentives-only approach has repeatedly failed to produce the necessary level of new housing. There’s also broad agreement that the governor’s best opportunity to get approval for the compact is in the budget, since it contains fiscal incentives tied to housing targets and because she will lose the major budget process leverage she has in the post-budget legislative session.
Carrots and Sticks
The proposal to set mandatory targets for housing creation is seen as the most essential to progress but has proven to be the most controversial aspect of the Housing Compact. Under Hochul’s plan, if localities either fail or refuse to meet growth targets or take any zoning actions to encourage new housing to be built, real estate developers would be able to use a fast-track method to get approvals for projects by appealing to the courts or a new state-level Housing Review Board.
“We feel very strongly about the mandate, and that without that this is not really a policy that is going to have a lot of impact,” said Visnauskas, in a recent appearance on Gotham Gazette’s Max Politics podcast. “And frankly, that we don't have a lot of time to do what other states did, which is work this out over the course of the next decade and maybe get to a mandate then, because the housing crisis is too real and too severe for too many people.”
As Visnauskas and Hochul have explained it, the Compact gives localities a great deal of say in how they grow, but they must grow their housing supply, before any enforcement or overrides kick in.
Republicans and some Democrats, particularly those representing the suburbs, have broadly criticized the mandate, insisting on maintaining “local control, not Hochul control.”
“Certainly, her proposal of having a statewide board that would overrule local government is inappropriate and probably unconstitutional,” said State Senator Patricia Canzoneri-Fitzpatrick, a Nassau County Republican, in a phone interview. “Her proposal would, in essence, nullify the votes of all of my constituents to elect intermediate levels of government and overrule them and say, ‘We don't really care what your local zoning says.’…That kind of dictator edict is not well received by anybody.”
Speaking to reporters on Monday, Assembly Speaker Carl Heastie, a Bronx Democrat, said any local zoning overrides were a tough sell for the Legislature. “As a state legislator, deference to local control is something that…you try to be respectful of,” he said. But he did concede that localities, particularly in the suburbs, need to build more housing and eliminate outdated regulations that have restricted new development. “I do think that you can try to deal with all of those things but you just have to try to figure out what's the best way to accomplish this,” he said.
Senate Majority Leader Andrea Stewart-Cousins, a Westchester Democrat, similarly said that every aspect of the Housing Compact was up for negotiation, even the growth mandate. “I'm not opposed to the ‘stick,’ as they say, but I don't like to start with sticks. I want to start with ‘carrots’ and community engagement so that we can get to the end that we'd like,” she said.
She insisted that Senate Democrats are looking at housing “holistically” and that there are issues that also need to be addressed, including the Housing Access Voucher Program, “good cause eviction” protections, and tenant rent-arrears funding. “I've always said our conference looks at it holistically. We know that we need to build more housing in New York. And we also know that we need to keep tenants in their housing,” she said.
Supporters of the Compact say the governor should not budge on the mandate, even if other aspects of the compact are dropped which could be addressed in the future.
“The governor really needs to hold the line and stay very strong on the proposal for the housing compact,” said Annemarie Gray, executive director of Open New York and a former New York City housing and planning official, in a phone interview. “[W]e need a statewide framework that has to be real, required, enforceable, permanent; that actually really makes sure every part of the state adds housing opportunities. And that has to be at the center of the proposal.”
Gray and others like Fee do say that the Compact could be improved and negotiated in different ways, and perhaps there could be more flexibility in the density requirements and local control.
“I think we do have to push localities to do their part, but I think we also have to be listening to what are some real concerns on how to fix this,” said Fee, who recently wrote an op-ed recommending areas of potential compromise. And the governor’s team is listening to feedback. Visnauskas said on the podcast that the proposal could be changed, for instance, to give some relief to localities that have already been steadily building housing or passing zoning reforms towards that goal.
But Fee insisted that the mandates should remain, instead of the incentive-only proposal floated by the Legislature. “What's on the table right now is an incentives-only approach which we feel will be totally ineffective,” she said. “And I think the Governor has been clear that she's not going to go for that and part of the reasoning is, we don't have time to waste. We've seen that this has failed in other states.”
‘It Has to Get Done in the Budget’
Asked about whether a housing deal needs to get done as part of the state’s massive budget agreement, Visnauskas pointed out that the growth targets are linked to the infrastructure and planning assistance funds proposed by the governor and Legislature.
“All those things, from my perspective, seem very much tied up in a budget conversation. These housing policies are very much related to the dollars that are in the budget. So I think it has to get done now,” she said. Some legislators have floated the idea of negotiating housing policy in the post-budget legislative session. Most experts and advocates agree that for Hochul to pass something truly transformational for the state’s future, it should be done in the budget, where the governor’s leverage is strongest and the opportunities for grand bargains are biggest.
“It has to get done in the budget,” said Fee. “The governor has no leverage to do this outside the budget process.”
There are also tax incentives that Hochul and others, like Mayor Eric Adams, have argued are crucial to the success of the plan. Both Adams and Hochul have insisted on the need to replace the 421-a affordable housing tax credit, which expired last year. Hochul had proposed and later abandoned an alternative 485-w proposal, which she did not revive this year. Instead she proposed an extension on the completion deadline for buildings to receive 421-a credits, and has put the onus on the Legislature to come up with a new replacement program.
But it's not just the fiscal implications that matter. Hochul came into her first full-term after a bruising election. She bested her Republican opponent, then- U.S. Rep. Lee Zeldin, by just six points, the closest governor’s race in decades. Then, she expended significant capital when she unsuccessfully nominated Hector LaSalle as the state’s next chief judge, rebuked by the State Senate, which rejected his nomination. Hochul is also now, for a second year in a row, insisting on changes to the state’s bail law in order to move ahead on the budget overall, frustrating many legislators and leading to questions about whether she will be able to get as much of her housing plan passed as she could have if she made it the top priority in negotiations.
While Hochul appears to have the most on the line politically, there’s also the imperative for legislators to act, as the housing crisis has continued to become more acute, deemed by many as a leading cause of the state’s population loss over the years.
“I don't think there's any point in kicking this can down the road. It's been kicked several times already,” said Fee, who has met with many legislators and others to pitch the Compact and potential compromises. “Coming out of this pandemic, it feels like we have really such intensity around our housing crisis right now. There are so many households with significant arrears at risk of eviction. There are so many migrants coming to New York and we have no housing to offer them. Between rents and home prices, both have gone through the roof. And all of that, to me, points to, we need to add more housing.”
Gray from Open New York echoed that concern. “We absolutely have to do this in the budget,” she said. “We don't have time to waste with people sleeping on the street, with people getting displaced right now, and with people just really not nearly having enough housing opportunities. And we're really supportive of tenant protections as part of a package as well, but it's just the act of taking meaningful steps to solve the housing crisis. You can't wait another year.”
‘A Real Legacy for Her’
While the conversation around bail reform has sucked all the oxygen out of the room in early final-stretch negotiations between the governor and the Legislature, her housing agenda has the promise of becoming a major legacy item of her tenure.
“If the Housing Compact is enacted, this will be a landmark legislation for the governor,” said Fee, “and it's a politically brave move and one that she knew would be faced with resistance, and she's moving forward anyway, because she thinks that's the right thing to do in New York, and one that's going to help solve our affordability crisis.”
“This is the first governor that has prioritized housing in the way she has, prioritized zoning reform and really started to tackle these issues in the way that she has,” Gray said. “I absolutely think that this has all of the ingredients to be a real legacy for her.”
“Certainly, yeah, it's a legacy project,” said Queens Borough President Donovan Richards, who has been supportive of housing and economic development in his borough and beyond. More housing supply is particularly necessary as Queens feels the squeeze from neighboring Long Island communities that have failed to grow, he said. But he did say that the success of the Compact will depend on implementation and investment. “Even if it passes, there's no magic wand that all of a sudden increases housing tremendously,” he said. “Different tools need to be put in place that would enable things to actually be built.”
Richards is among several borough presidents who are eager to see more housing built in their boroughs and who have praised Hochul’s proposal, as has Mayor Adams, who sees Hochul’s plan as potentially very helpful to his own plan to build 500,000 units of new housing over a decade.
“No New York governor has ever tackled this the way she’s proposing to,” said Sean Campion, Director of Housing and Economic Development Studies at Citizens Budget Commission (CBC), a nonprofit group that has examined New York’s slow pace of housing growth and the impediments to fixing it. CBC, like Open New York and New York Housing Conference, is supportive of the Housing Compact.
He noted, however, that other states have already gone down this road and are building far more housing than New York. “Yes, it would be truly part of your legacy if it passes,” he said of Hochul, “and succeeds at increasing production, but this is just a basic thing that almost every other state in the country acknowledges is the problem and is trying to do something about.”
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by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
Senator Liz Krueger (photo: NY Senate)
Lawmakers in Albany are in the midst of crafting a new budget, with negotiations now stretching beyond the April 1 start of the new fiscal year. Democratic Governor Kathy Hochul and the two houses of the State Legislature, both with Democratic supermajorities, are likely to pass a budget “extender” so the state can pay its bills, especially payroll, as they continue negotiations this week.
State Senator Liz Krueger, a Manhattan Democrat who leads the Senate’s finance committee, has been at the center of the budget process, co-chairing weeks of legislative hearings on Hochul’s $227 billion executive budget and helping to craft the Senate’s one-house budget resolution, which was passed mid-March.
Just after both houses passed their one-house budgets and negotiations with Hochul’s office were set to intensify, Krueger joined Gotham Gazette’s Max Politics podcast to discuss Senate Democrats’ priorities, negotiations with the Governor, and more.
Hochul’s executive budget, released February 1, and building upon her January State of the State policy agenda, set the stage for the process. The governor, who just won her first term in the role but is negotiating her second budget since ascending from lieutenant governor, included many proposals in her budget, taking on a wide range of issues and offering several measures controversial with the legislative majorities. They included a sweeping and ambitious housing plan, a push to increase the cap on charter schools in New York City, further changes to the state’s bail law to allow for more pre-trial detention, a plan to fund the Metropolitan Transportation Authority (MTA), major climate and energy policies, and much more.
On the podcast, Krueger offered a broad response to the governor’s agenda, in large part through the lens of the Senate’s one-house budget. She stressed that while lawmakers are opposed to a number of Hochul’s ideas, there’s agreement on many others, and room for negotiation on key areas where there is disagreement.
“It’s quite the challenge to narrow that down into an actual sort of summary of what our budget would support and not support in the governor’s budget, what we would add, what we would subtract, and what we would replace,” Krueger said of the process of crafting the one-house budget resolution, which is non-binding and more of a negotiating document. “It’s fairly complex, and we come out with a very long laundry list of things we agree and disagree with."
Of the final stretch of budget negotiations, Krueger said, “It’s the staff of a governor, the Assembly, and the Senate in rooms together saying, ‘OK, this is what my house wants. This is what my house wants. This is what the governor wants. Can we come to an agreement? Can we agree to throw it away because we’re never going to come to an agreement? Can we negotiate something we can all live with?,’ And we build toward a final set of budget bills that need to pass both houses.”
Of the potential for budget negotiations to go into April, past the start of the new fiscal year, as they now have, Krueger said, “I’ve been here 20 years, and I always tell everyone, ‘Bring extra underwear.’”
On the podcast, Krueger touched on many of the Senate majority’s priorities and responses to Hochul’s proposals, the status of budget negotiations at the time in mid-March, and what she expected to come.
Criminal Justice
On the issue of criminal justice and how it fits into this year’s budget, Krueger said legislators have “a much longer list than we think the governor does.” While bail reform has been a controversial and dominant issue for years and is again this year, Krueger said there is little appetite for revisions again this year.
"We've done bail reform several times,” Krueger said on the podcast. “We've done hearings already this year looking at the data that's coming out. I don't think there's much room in either house of the Legislature to take on bail again."
“There’s criminal justice issues we would love to come to agreement on, but we don’t think the actual problem of growth in crime was caused by bail or that it’s creating a new problem, so we would much rather focus on the other issues in crime,” Krueger continued. “We’ll see whether the governor’s willing to do that.” Indications before and after those comments are that Hochul is insistent again this year that changes to toughen the bail laws must be made in the budget, and like last year, it is proving key to why the budget is late.
Krueger, who was the lead Senate sponsor of the law that legalized adult use of cannabis in New York, also discussed efforts she’s leading that could be part of a budget deal to increase penalties on businesses selling illegal cannabis products, as well as for those who knowingly lease commercial space to the rapidly proliferating illegal smoke shops.
“The bill would significantly increase penalties on the illegal shops, because right now they don’t really think they face any penalties except an occasional sheriff coming through and pulling the stuff off their shelves — no other penalty, and that’s not working,” Krueger said. “What they’re selling is illegal product coming in from other states, that we don’t even know what it is, and the testing shows that some of it is pretty crappy stuff.”
There appears to be alignment among Hochul and the Legislature on taking some such measures, but the final details as yet to be seen.
Although she said that she does not intend to re-criminalize cannabis by means of fines, Krueger said she wants police departments across the state to understand that they have more authority than she currently sees them enforcing against the shops selling illegally, which has been a point of contention in New York City where Mayor Adams, the NYPD, and the Sheriff have performed limited enforcement. She said the bill would allow law enforcement to revoke tobacco and CBD licenses for good if sellers are caught peddling illegal cannabis products.
Education
In light of Governor Hochul’s controversial proposal to raise the cap, which has been hit, on charter schools in New York City, allowing for around 100 more of the privately-run public schools to be authorized.
“The city of New York doesn’t seem to want the expansion of charters, and the Legislature doesn’t want the expansion of charters, so I just don’t think there’s a lot of room there for any negotiations,” Krueger said on the podcast.
She acknowledged that Mayor Adams may be supportive of charter schools but noted that during his state budget testimony to the Legislature he said the city does not have the money to spend on rent for more charter schools, which by state law must be given school space at the city’s expense, whether in public or private buildings. Krueger said that the Legislature does not intend to allocate the roughly $1 billion the mayor asked for to pay for charter school rent if the cap is raised.
Krueger also noted that it’s a priority for the Legislature to pass and fund universal free school meals — meaning all children across the state could access free breakfast and lunch every day at school.
“Everyone seems to recognize the importance of children having nutritious meals,” she said. “They learn better, they have better IQs, they’re healthier. It’s a very low-cost option to really address the issues for so many children in the state.”
Housing
On housing and the governor’s major ‘Housing Compact’ plan, Krueger said Hochul’s language in her proposal “did not seem to be satisfactory to almost anyone.”
Hochul’s plan would add 800,000 new homes to the state in the next 10 years through the use of mandatory local growth targets, zoning mechanisms, and many other planks.
“Housing is absolutely critical, but there was so much disagreement with almost every one of the governor’s proposals,” Krueger said of how the Senate crafted its one-house budget, which stripped out most of Hochul’s proposals but did keep the growth targets, albeit not required, and additional incentive money for infrastructure for localities that do welcome housing production to meet the state’s massive need. “We don’t want to leave Albany this Spring without dealing with the housing crisis, but most of the governor’s proposals were not the ones that were going to go.”
Krueger's mention of Spring was indicative of her belief that much of housing policy could potentially be dealt with in the legislative session after a budget, given that the session runs into June. But other legislators and members of the Hochul administration insist housing must largely if not fully be dealt with in the budget.
Krueger added that the Legislature’s priorities on housing include significant rent-arrears funding for the New York City Housing Authority (NYCHA), funding for the Homeowner Protection Program, which provides legal assistance and resources to homeowners facing eviction, and other policies that are not focused on housing production.
On growth targets and mandates, Krueger said there are localities where many officials say they want to build more and they can now do so, without state action, even if there is less will other places. “When you look at the City of New York, we have elected officials who say they want all this to happen,” Krueger said on the podcast. “When you look at other counties, they don't always say they want this to happen, as you’ve pointed out with Long Island. So that’s why I’m trying to point out that maybe different carrots and sticks work differently in different parts of the state.”
Krueger indicated that the Senate’s budget was not a final offer in negotiations, but a starting point from the majority’s perspective, and that on growth targets, transit-oriented development, and more, there is room for discussion.
Krueger said she is open to Hochul’s proposal to convert commercial buildings to residential spaces, but added that she is pushing for mandatory affordable units as part of any shift in regulations. She also said that she is not against the governor’s proposal to authorize legal basement units in New York City, and believes that the city has a lot of potential to build in that direction.
Taxes and Tax Breaks
The senator added that despite Hochul’s pledge not to raise any income taxes this year, legislators in both houses have proposed a small income tax increase for those who make $5 million or more each year.
“We believe that the amount we’ve proposed increasing, on $5 million and up, would not impact people picking up and leaving and stop doing business in New York, but that money can go an incredibly long way to help us pay for the priorities that make the state a great state,” Krueger said.
Krueger asserted that people are more likely to stay in New York or locate their residences and businesses here if budgets invest in bolstering infrastructure, and bettering quality of life, rather than focusing on minimizing tax rates.
“We have money to invest in education because what do businesses want? They want an educated workforce to work for them, they want access to utilities, and we’re heading rapidly to a green economy of green utilities,” Krueger said. “Those are the things that keep states strong, and actually help them pull out of bad economic times quicker.”
Krueger maintained that she is against Governor Hochul’s proposals to increase the state’s film and TV tax credit program to $700 million per year, but said that she was overruled by other legislators and the Senate budget supported the increase.
“If I was queen for a day, I probably would not be including that in the budget, but I have total respect that I am one legislator who needs to negotiate with my own conference as well as the Assembly and the governor,” Krueger said on the podcast. She said she is, overall, against various tax credit programs and other business deals, and against the governor’s proposed state loan for a complete renovation of Belmont race track, which was also supported in both legislative houses’ budget resolutions.
Other Issues
The interview also touched on MTA funding, cost-of-living increases for workers at nonprofits the state contracts with, climate policy, and more.
“We put a lot of proposals in for our commitment to a green system of energy and the economy, and some revenue sources,” Krueger said on the podcast. “I keep telling everyone: If we don’t get climate change right, it doesn’t really matter what else we do, because we won’t be around to deal with it.”
Listen to the full discussion here.
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by Abby Wilson, Gotham Gazette
@GothamGazette
Inside the State Legislature (photo: Mike Groll/Office of Governor Kathy Hochul)
Despite funding in the executive and legislative budget proposals, lawmakers have not ruled out shelving the state's fledgling public campaign finance system for the upcoming election cycle.
Rumors that lawmakers were considering delaying the new small-dollar matching program as part of budget negotiations have been swirling since such talks were first reported by Spectrum News in late February. A few weeks later, however, the State Senate and Assembly one-house budget resolutions each met Governor Kathy Hochul's proposed $39.5 million for the new system – including $25 million for matching funds and $14.5 for administration.
But the apparent accord on the program has not been enough to assuage fears among reformers that the long-sought public financing system will be postponed in the adopted budget. A spending and policy plan is due by the April 1 start of the new state fiscal year, though budgets in Albany are often late.
Passed by Democrats in 2020, the system applies to candidates for statewide and state legislative seats, lowering individual contribution limits to candidates and establishing a public matching fund that multiplies low-level in-state or in-district contributions. Proponents, including many of the Democrats who currently make up supermajorities in the Senate and Assembly, argued the system would help reduce the impact of deep-pocketed donors in elections, encourage candidates to engage more voters, and make elections more competitive.
The public funds, offering a 6-to-1 match or greater to donations up to $250, are set by law to begin being paid out in the next state election cycle — the 2024 races for all 213 seats in the State Legislature. The Public Campaign Finance Board that is administering the program has already been appointed and for the past few months has been hiring staff, holding trainings, and setting out regulations for the system.
Despite the progress (and $20.6 million already allocated by lawmakers last year), the program's fate remains uncertain. Last week, Senate Majority Leader Andrea Stewart-Cousins avoided ruling out the possibility of delaying the implementation of the matching funds program when asked about it on The Capitol Pressroom.
"I have no idea," she told host David Lombardo of the chances of postponing the program in the adopted budget. "Both of our houses had campaign finance as does the governor's, so I have no expectation of anything falling off the table but we'll see."
Stewart-Cousins is one of three top officials, along with Hochul and Assembly Speaker Carl Heastie, all Democrats, who are leading negotiations of a roughly $230 billion state budget.
A coalition of advocates for campaign finance reforms and the public matching system are in Albany this week pushing to make sure the funding is in the final budget with no postponement.
“As the budget is finalized, our state’s leaders must cement their commitment to this groundbreaking program – not only by funding it, but also by ensuring that it remains available to candidates for the 2024 elections, some of whom have already started opting in," wrote Joanna Zdanys, senior Counsel at the Brennan Center for Justice and a member of the coalition, known as Fair Elections NY.
"Recent news pieces have reported rumblings that some lawmakers want to see the program delayed. There is absolutely no reason to do so," Zydanys told Gotham Gazette. "The program is ready to go, and this reform – which New Yorkers have long called for, and support by large majorities – is an essential way for everyday voters to have a greater say in our state’s politics.”
Asked to respond to Stewart-Cousins' remarks, a spokesperson for Hochul pointed to the governor's commitment in the executive budget.
"Governor Hochul's Executive Budget makes transformative investments to make New York more affordable, more livable and safer, and she continues to work with the legislature to deliver a final budget that meets the needs of all New Yorkers," wrote the spokesperson, Hazel Crampton-Hays, by email.
Lawmakers have expressed to advocates that part of the concern is over the expected price tag of the public match in the next state elections – estimated at $100 million, a majority of which would need to be included in next year's state budget if it is not included in the upcoming plan. But few have spoken publicly on the record about the status of talks.
On Thursday, a group of advocates and legislators spoke against defunding or delaying the program at rally in the State Capitol hosted by Fair Elections NY.
"For people who want to stop it, we are here to say you can't," said Assembly Member Harvey Epstein, a Manhattan Democrat. "We passed it because we're going to fight for it and are going to ensure that the money stays in the budget [and] there is no delay. There is no reason to delay."
"I'm hopeful as budget negotiations continue that we can get what we fought for," said Assembly Member Linda Rosenthal, another Manhattan Democrat, who also spoke at the rally.
Democratic Senator Rachel May of Syracuse said she "desperately" wanted to see the system in place for the 2024 state elections. "I'm proud that our majority leader supported putting the money in the budget this year and I will work with her to make sure that it stays," she said.
Spokespeople for Stewart-Cousins and Heastie did not provide statements in response to requests for comment. Nor did the chairs of the Legislature's finance and elections committees.
Senator Jessica Ramos, a Queens Democrat and longtime proponent of a public campaign finance system, defended the program but didn't rule out a delay. "I maintain that public matching is an important tool for the health of NY's democracy," she said in a statement provided by a spokesperson when asked if she was open to postponing. "The budget process is moving forward and we will see what the final language looks like as it progresses."
Reached by phone, Assembly Member Jeffrey Dinowitz, a Bronx Democrat, was not unsettled by the idea of postponing the system and painted the start-date of the campaign finance program as a question of preparedness.
"I don't think it would make a big difference," he said of a potential delay. "We have to make sure it's ready to be up and running."
Some lawmakers are still looking to make changes to the program even with Board operations underway.
A day after Hochul announced her $227 billion executive budget, Dinowitz introduced a bill that would eliminate the requirement that only funds from small donors (below $250) would be matchable; instead the first $250 of any sized contribution, up to the maximum limit, would be eligible for matched dollars. Some advocates are concerned the change would eliminate the advantage of seeking small donations and nullify a key feature of the legislation: to limit the influence of big election spenders and encourage candidates to focus on a broad swath of voters and donors.
"People are going to give what they want to give, what they're able to give. I think if the intent is really to force contributors not to give more than $250 then that's almost coercive," he said, noting that the purpose of the bill is to bring the state system in line with New York City's lauded campaign finance program, which matches contributions over the small-dollar threshold.
The bill has the co-sponsorship of a number of progressive Assembly members including Rosenthal and a number of democratic socialists. But it has no counterpart bill in the State Senate.
"That's probably a post-budget discussion and we have plenty of time for that," Dinowitz said of getting one. "Plenty of time."
***
by Ethan Geringer-Sameth, reporter, Gotham Gazette
@GeringerSameth @GothamGazette
The Governor, Mayor, ABNY leaders, Richard Buery & Dan Doctoroff (photo: Governor's Office)
As final negotiations over the state budget take place in Albany, a panel of experts convened by Governor Kathy Hochul and Mayor Eric Adams are urging the State Legislature to support a series of proposals to tackle the state’s immense need for new housing.
In June 2022, the governor and mayor assembled the 'New' New York panel of more than 50 experts and leaders across labor, business, academic, nonprofit, and philanthropic circles to advise them on the future of the city and state. The panel was co-chaired by Richard Buery, CEO of Robin Hood and former deputy mayor under Mayor Bill de Blasio, and Daniel Doctoroff, former CEO of Sidewalk Labs and a deputy mayor under Mayor Michael Bloomberg.
In December, the panel and the Hochul and Adams administrations released an action plan with 40 proposals to revive New York City’s business districts, improve mass transit and public realm infrastructure, boost housing supply, increase workforce participation, and broadly bolster economic development.
The housing proposals included in the plan are essential to the governor’s “Housing Compact” to create 800,000 homes over the next decade and the mayor’s separate, but related, plan to build 500,000 homes in the city in that same time. But the governor’s ambitious plan, which she released in January, has met with significant resistance, including from the Democratic majorities in the Senate and Assembly.
In a letter sent on Wednesday, Buery and Doctoroff urged Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie to support proposals aimed at addressing the state’s housing shortage. The letter was co-signed by 17 other members of the ‘New’ New York panel.
“As leaders of the New York State Legislature, you understand better than anyone the severity of New York City’s housing crisis,” the letter reads. “We are writing to urge the Legislature to meet this crucial moment with thoughtful and fair-minded policy that both unlocks New York City’s housing potential and helps secure our collective economic future.”
Buery and Doctoroff emphasized that the recovery of business districts, “the fiscal foundation of our entire state,” depends on ensuring that workers have ample and stable housing. “Without this, companies will hesitate to locate in New York and we will lose out on jobs and tax revenue,” they wrote.
They called on the Legislature to embrace the governor’s wide-ranging Housing Compact, “a common sense and achievable plan, which sets goals for communities but allows each village, town and city to tailor solutions for how to grow based on local needs.” In their respective one-house budget resolutions, the Democratic majorities in the State Senate and Assembly agreed with the governor’s proposal to set targets for regional housing growth but stripped out mandates and enforcement mechanisms. Instead, the Legislature proposed $500 million in incentives to encourage local housing creation, an approach that has failed in other states. But legislative leaders have indicated they are open to negotiations with Hochul to get to a final compromise that takes on the housing crisis.
“We all deserve more choices for where and how we live. The old system of only offering incentives to build has not worked,” Buery and Doctoroff wrote in their letter. “Now is the time for a new path to building more units to ensure that New Yorkers have access to housing—and for every community to do its part.”
Spokespeople for Stewart-Cousins and Heastie did not respond to a request for comment on the letter from Buery and Doctoroff.
Among the more specific proposals they are pushing for is passage of legislation to eliminate the floor-area ratio (FAR) cap on residential buildings in the city, which would allow for denser development and consequently more affordable housing.
The state must also make it easier, they wrote, to convert underutilized office buildings into housing. In her budget, Hochul proposed expanding the types of buildings that are eligible for conversion while also floating a tax incentive for conversions that include a certain amount of affordable housing. The Adams administration has been supportive of both proposals.
Both the governor and mayor have argued that a crucial aspect to their housing plans is a replacement of the 421-a affordable housing tax break, which expired last year. Hochul had attempted last year to put forward a modified alternative program, called 485-w, but it failed to get support from the Legislature. This year, Hochul did not propose a new program and instead laid the onus on lawmakers to come up with a substitute, though she is proposing an extension of 421-a eligibility for projects already in motion.
In their letter, Buery and Doctoroff said a new tax incentive is imperative for success. “None of this will get done without it,” they wrote. “An extended period without a replacement to the prior program will mean historically low housing production at a time when everyone claims to be trying to ramp up housing production.”
The state fiscal year begins April 1, but Hochul and legislative leaders have already acknowledged that the next budget will not meet that deadline. They may pass an “extender” so state bills, including payroll, get paid while they negotiate housing and other policies.
***
by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
NYS Housing Commissioner RuthAnne Visnauskas (photo: Mike Groll/Governor's Office)
March 29, 2023 - Max Politics Podcast: Commissioner RuthAnne Visnauskas on Governor Hochul's 'New York Housing Compact'
New York State Housing Commissioner RuthAnne Visnauskas joined the show to discuss Governor Kathy Hochul's New York Housing Compact proposal, negotiations with the Legislature, meetings around the state to discuss the plan, and more.
Listen to the conversation and let us know what you think, on Twitter @TweetBenMax. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts at Max Politics.
Gov. Hochul addresses the Legislature (photo: office of Governor Kathy Hochul)
The Democratic supermajorities in the State Senate and Assembly recently laid their cards on the table with the passage of their chambers' one-house budget resolutions.
The resolutions serve as opening counter-offers to Governor Kathy Hochul's $227 billion executive budget and sweeping policy agenda, marking battle lines and raising the stakes on a number of key issues. They followed weeks of legislative hearings on the governor's proposals.
Hochul, Senate Majority Leader Andrea Stewart-Cousins, Assembly Speaker Carl Heastie, and members of their teams now lead negotiations as the April 1 start of next fiscal year quickly approaches. A spending plan, with whatever accompanying policy is agreed upon, is supposed to be in place by that deadline, but New York state budgets are often passed late. (Hochul’s first budget as governor was eight days late last year as she insisted on changes to the state’s bail law and a last-minute $600 million subsidy for a new Buffalo Bills stadium.)
There are several notable places where the legislative chambers differ from the governor and each other, setting the stage for heated debate — one that many other stakeholders, including Mayor Eric Adams, are trying to influence. State leaders must come to a conceptual agreement on the total size of the budget, and many details of fiscal policy, including tax rates, business subsidies, reserves levels, and more.
While this is Hochul's second budget season in the Governor's Mansion, it is her first after being elected to a full term by a relatively narrow margin and comes just after a bruising political fight with a State Senate that voted down her nomination for chief judge. Hochul laid out an ambitious agenda earlier this year through her State of the State and executive budget, and has gotten significant push back on several proposals, including to bring more housing to the suburbs, make further changes to the state's bail law, increase the charter school cap, MTA and Medicaid funding schemes, and a host of other contentious topics.
Here are 20 areas to watch as the budget unfolds:
1. Cuts and Cost Shifts to New York City
The governor’s budget proposed several cuts and cost shifts that would fall on New York City as it deals with its own fiscal pressures, particularly the $4.2 billion, two-year projected cost of the migrant asylum-seeker crisis.
“While the executive budget contains many shared priorities, the cuts and costs shift significantly outweigh the assistance the state is providing to address the asylum-seeker crisis,” Mayor Adams said in testimony last month in Albany before the state Legislature.
The governor has proposed $1 billion in assistance over two years for migrant shelter and services, even as Adams has called for a 50-50 split of the bill between the city and state as the amount of federal assistance remains uncertain.
Adams has also pushed back against the governor’s proposal to increase the city’s contribution to the MTA by $500 million annually, as well as a proposed increase in the Payroll Mobility Tax and expected fare hikes that would both affect New York City residents and commuters that work in the city.
While Adams supports the expansion of charter schools that Hochul is proposing via lifting the New York City cap on the privately-run public schools, the mayor has said any such move should come with additional state funding to help the city pay for the schools’ rent.
Adams is also pushing back on potential cost-shifts around Medicaid, wage increases for certain court-appointed attorneys, and more. In their budget resolutions, both houses of the Legislature crafted plans more friendly to the city’s bottom line than Hochul’s.
[Read: 6 State Budget Proposals Where Hochul and Adams are At Odds]
[Read: In Albany, Mayor Adams Testifies on Governor Hochul's Budget, State Priorities]
2. MTA Funding
The MTA survived the pandemic with the help of federal aid that is expected to run out by 2025. But the agency has a $600 million deficit that continues to threaten its finances, particularly as ridership has yet to recover to pre-pandemic levels — subway ridership has been stuck at about two-thirds of pre-pandemic numbers on most weekdays. The authority’s $19.2 billion operating budget for 2023 includes a 5.5% hike on fares and tolls this year, following through on a previously planned increase in 2021, as well as cost-cutting measures and potential cuts to service.
Governor Hochul’s executive budget proposal addressed the agency’s structural deficits with several proposals – identifying $400 million in operating efficiencies, $800 in additional revenue by marginally increasing the Payroll Mobility Tax, a $300 million infusion of one-time aid from the state, and the additional annual $500 million contribution from New York City. Under the governor’s proposal, the MTA would also receive a share of the $1.5 billion raised from licensing fees of three new downstate casinos as well as somewhere between $462 and $826 in projected annual casino tax revenue starting in 2026.
Mayor Eric Adams has pushed back against the MTA funding proposal. He has pointed out that the city already sends the MTA about $2.4 billion annually in operating funds and that the governor’s proposal would cost the city closer to $526 million in the next fiscal year and more than $540 million every year after that.
Assembly Democrats rejected the proposal to increase the Payroll Mobility Tax to generate an estimated $537 million and the city’s contributions to the MTA, which they estimated would cost about $369 million in the 2024 fiscal year. Instead, they called on the state to cover that funding while also pushing for $196.9 million for the MTA to avoid the fare increase to $3. They also proposed a $50 million zero-fare bus route pilot program for two routes in each borough.
Senate Democrats also intentionally omitted the proposal to increase the city’s MTA contributions, rejected increased fare hikes in 2023 and 2025, proposed increased surcharges on for-hire vehicles, and supported the proposed free bus route pilot. They also proposed directing casino revenue to education instead of the MTA and authorizing the city to create a residential parking permit program with revenue dedicated to the MTA.
The Senate also proposed eliminating the $43 million annual property tax exemption for Madison Square Garden and sending future property tax revenues to the MTA.
3. Asylum-Seeker Funding
As New York City continues to deal with the arrival of tens of thousands of migrant asylum-seekers, the cost of providing shelter and services has ballooned, straining the city’s budget. Officials from the Mayor’s Office of Management and Budget (OMB) estimate that it will cost the city more than $4.2 billion in the current and next fiscal years combined.
The city has called on the federal and state governments for more aid to deal with the crisis. The federal government has, so far, only awarded the city about $8 million in FEMA funding, but separately appropriated $800 million to help cities with their migrant influx nationally. It’s unclear how much the city will receive from that pot, though OMB officials told the City Council that they don’t expect any additional federal aid in the current fiscal year, which ends June 30.
Governor Hochul, in her budget, provided $1 billion in assistance over two years, which would include reimbursing 29% of the city’s shelter costs as the state usually does, and proposed a framework to split the costs of services evenly among the city, state, and federal governments.
The Senate budget supports reimbursing the city for 29% of its costs even if they exceed the governor’s $1 billion proposal for the Migrant Service and Assistance program. The Assembly one-house budget merely provides $40 million for immigration legal services for migrants and asylum-seekers.
After meeting with the governor and legislators in Albany on Monday, Mayor Adams cited funding for asylum-seeker services as his top state budget priority, along with resolving the question over MTA funding without the city being required to meet the governor’s proposal.
4. Charter School Cap
Hochul wants to increase the number of charter schools in New York City, a contentious issue opposed by teachers unions and many Democratic legislators. Her proposal would eliminate the regional cap on the number of charters permitted in the city, which has been hit, and authorize unused charters to be reissued. In sum, it would allow more than 100 new charter schools in the city.
Both chambers excluded the proposal in their one-house budgets signaling an uphill battle as budget negotiations unfold. Enrollment in privately-run public charter schools has grown significantly over the last decade while traditional public school enrollment has declined. Many charter schools, which predominantly teach Black and Latino students, continue to grow as they add grade levels in expansion based on their original charter approvals.
Hochul has argued the relative demand is a reason for expansion while Heastie and Stewart-Cousins have indicated they believe those resources should be put toward traditional public schools, which account for roughly 86% of the city's public school student body.
While Mayor Adams is supportive of charter school growth in general, he said in state budget testimony that the governor’s proposed expansion of charters could cost the city $1 billion more annually in rent payments.
5. Local Medicaid Costs
Hochul's proposal includes ending a Medicaid cost-sharing arrangement between the state and counties that has been in place since 2015. The state's Medicaid program, which provides health care coverage for low-income New Yorkers, is funded by a mix of federal and state money, with the majority share falling on the federal government.
Under the governor's plan, the state would keep the full enhanced Federal Medical Assistance Percentage (eFMAP) funding to localities, which is provided under the Affordable Care Act. The proposal has been fiercely opposed by local leaders who said counties would have to cover the funding gap by raising taxes or cutting services.
Mayor Adams estimated the plan would cost New York City $343 million next fiscal year. The New York State Association of Counties estimated the change could cost counties outside New York City $280 million in the next fiscal year.
The Senate and Assembly both rejected that proposal by including $624 million to be passed back to counties and New York City to offset the state's eFMAP grab. The one-house budgets also each rejected a Hochul proposal to delay adding coverage for undocumented immigrants over 64 who were previously ineligible for Medicaid. Both houses also included coverage for income-eligible undocumented immigrants under the Essential Plan, a state-operated, federally-funded health care option for low-income residents who are ineligible for Medicaid.
6. SUNY and CUNY Tuition
Hochul's executive budget proposal of tuition increases for SUNY and CUNY received strong backlash from student advocates and some state legislators and was mostly rejected in both one-house budgets.
The executive budget includes an annual tuition increase for SUNY and CUNY students indexed to the Higher Education Price Index – a measure of inflation in higher education costs – and capped at 3% annually. It also would allow tuition to increase up to 6 percentage points annually at SUNY's four university centers with a cap at 30% over five years. According to the state Division of the Budget, the increases would raise $97 million for SUNY and $31 million for CUNY in academic year 2024 operating funds.
The Senate's response rejected Hochul's tuition hikes for SUNY and CUNY while leaving open the possibility for SUNY tuition increases for out-of-state students. The Assembly one-house budget rejected the increase for CUNY students only.
Overall, Hochul’s budget proposed a decrease in CUNY funding from the state while the legislative budgets include significant increases.
7. Tax Rates
In 2021, lawmakers raised the corporate tax rate on corporations earning over $5 million in profit from 6.5% to 7.2%. Hochul's executive budget included a three-year extension on the higher rate, which will otherwise sunset at the end of this year.
The Senate and Assembly one-house budgets both include the three-year extension but rejected an additional payroll tax to fund the MTA. Instead, each house proposed covering that additional revenue through an increase in the corporate tax rate downstate. In the Senate's case that came by increasing the MTA surcharge – a boost in the corporate tax rate for businesses in downstate counties served by commuter rail.
Both one-house budgets also included personal income tax increases for the highest earners, raising the rates half a percentage point for filers making between $5 million and $25 million annually and for people making over $25 million. Hochul's proposal would keep income taxes flat, and the governor has vowed not to raise income taxes this year. Meanwhile, many lawmakers and advocates want to go well beyond the tax increases in the legislative proposals to raise billions more to fund social services.
8. Minimum Wage
Senate and Assembly Democrats are upping the ante on Hochul's proposal to tie New York's minimum wage to inflation, arguing the base wage must first be raised in order to help low-wage workers keep up with rising prices. The minimum wage is now $15 an hour in New York City, Long Island, and Westchester and nearing it elsewhere in the state ($14.20) as the gradual phase-in to $15 passed in 2016 nears completion.
Hochul's executive budget included a cap on annual minimum wage increases at the lower of 3% or the increase in the Northeast Consumer Price Index rate, which measures inflation. It also includes exceptions in the case of certain economic downturns.
The one-house budgets did not specify an exact amount for base wages to increase before being indexed to inflation. Legislation introduced in the Senate and Assembly would raise the minimum wage in New York City and parts of Long Island to $21.25 an hour by 2026 and to $20 an hour in the rest of the state, with increases pegged to inflation thereafter.
9. Funding for Prosecutors and Public Defenders
In her budget, Hochul proposed $52 million in “aid to prosecution” funding, a nearly $40 million increase, to help the state’s 62 counties hire more prosecutors and bolster their offices as they deal with the mandates of recent state criminal justice changes including discovery and speedy trial reforms.
The governor’s budget would also continue a $40 million annual allocation for prosecutors in counties outside New York City to comply with the discovery reform law that went into effect in 2020. Additionally, the state would provide $7 million to DAs that establish specialized units dealing with the opioid overdose crisis.
Public defenders, however, have argued that they also need a commensurate boost in resources as they too contend with the new criminal discovery laws. Public defender organizations are already struggling with staffing crises as their caseloads have increased, leading to further case delays and increasing the backlog in criminal courts.
[Read: As Prosecutors Get Budget Boost, Public Defenders Seek More Funding Too]
Hochul’s budget for the state Office of Indigent Legal Services, which aids counties and indigent legal service providers, remains flat at $359 million for the next fiscal year. She also allocated $7.6 million for “aid to defense” programs for indigent service providers like the Legal Aid Society, an amount that is also unchanged from the current fiscal year. The budget did propose increased pay rates for “18-b attorneys” under the state’s Assigned Counsel Program.
The Senate’s one-house budget includes $47 million to support criminal defender services and another $40 million for “Discovery Reform Criminal Defenders,” and adds $35 million in funding for the Office of Indigent Legal Services, among other measures raising pay rates for assigned counsel attorneys.
The Assembly’s proposed budget sets the Office of Indigent Legal Services budget at $564 million, an increase of $198 million over the governor’s proposal. It also adds $100 million to help public defenders comply with the criminal discovery law, and an additional $60 million for prosecutors on top of the $40 million that the governor proposed, for $100 million total.
10. Bail Reform
After the State Legislature approved sweeping reforms to the state’s bail system and then revised and tightened them twice, including last year, Hochul is pushing for another amendment this year. It is again among the most controversial elements of budget negotiations, with her calls for more pretrial incarceration met with opposition by many legislators and criminal justice reformers.
Hochul seeks to eliminate the “least restrictive means” standard that judges are required to use when setting bail. She has insisted that it is necessary to clear up contradictions in the law – in part a result of changes she saw through last year – and would apply to violent felonies, high-level misdemeanors, and repeat offenders. Hochul demonstrated last year that she is willing to delay the budget if the state Legislature doesn’t approve her demands on bail law changes, potentially setting up another face off this year.
Hochul has the support of some moderate and conservative Democrats, including most prominently Mayor Adams, as well as Republicans who are pushing for even greater amendments to the bail law. In particular, Adams and others have called for instituting a “dangerousness” standard that judges can use while deciding to set bail or remand a defendant to custody.
As expected, Democrats in both houses of the Legislature rejected Hochul’s idea and it was not included in their one-house budgets.
11. Alternatives to Incarceration and Re-entry Services
Hochul included $31.4 million for funding alternatives to incarceration in her executive budget, double the funding in the enacted budget for this fiscal year.
The executive budget also includes $7.7 million in new funding for reentry services, which would bring total funding to $11.5 million.
The Senate's one-house budget added to Hochul's proposal an additional $10 million for "criminal and civil legal services, alternatives to incarceration, community supervision and re-entry initiatives." The Senate budget also adds $1 million from the federal Justice Assistance Grant appropriation to violence, crime, and drug prevention and alternatives to incarceration. The Assembly's one-house budget adds $5.2 million for alternatives to incarceration, which can include community supervision and employment-based programs.
Some state legislators are pushing for the inclusion in the state budget of the Treatment Not Jails Act, which would expand mental health treatment courts statewide. It was not included in the one-house budget resolutions, but elements of it could make their way into a budget deal.
[Read: State Legislators Push 'Treatment Not Jails Act' to Avoid Incarceration for Many with Mental Illness]
12. Hochul's Housing Plan
“Housing Compact” to build 800,000 homes over a decade to meet the state’s desperate need for housing. Her plan involves a broad mix of policies including mandatory local and regional targets for housing production, amendments to state zoning rules, tax credits, infrastructure and planning funding, and more.
One of the measures she proposed would create processes to override localities when they either fail or refuse to meet targets for housing creation. It has prompted heated opposition, particularly from suburban lawmakers who believe the state is attempting to supersede local control of land use decisions.
There are several other proposals in her housing plan including required rezoning for higher density around all MTA subway and rail stations, eliminating the Floor-Area-Ratio (FAR) cap in New York City that limits apartment building density, expanding commercial conversions to housing and incentivizing it with a new tax credit, expanding a property tax exemption for Accessory Dwelling Units (ADUs), allowing New York City to legalize basement apartments, a new local property tax exemption for multifamily affordable housing, and more.
Hochul did not, however, propose a new affordable housing tax abatement to replace the expired 421-a program, after floating and then later abandoning an alternative program called 485-w last year. But she does want to see a new version of such a program agreed to in the new budget, or at the least, for now, support for her proposed extension of the construction deadline for buildings to receive 421-a credits, from completion in 2026 to 2030, which would apply to tens of thousands of potential apartments.
Both the Senate and Assembly, in their budgets, rejected the governor’s proposed mandatory housing growth targets and zoning override proposal, though they did both include the growth targets and leaders have said they are open to negotiations on many details around housing.
The Senate proposed $500 million in annual state infrastructure funding incentives to encourage housing creation. The Assembly proposed the same amount for municipalities outside New York City and $125 million separately for New York City.
13. Good Cause Eviction and Housing Access Vouchers
Two top priorities for housing and tenant advocates this year are the so-called “good cause eviction” bill and the Housing Access Voucher Program (HAVP).
Good cause eviction would protect tenants against exorbitant rent increases as well as prohibit evictions in most cases unless tenants violate a lease agreement. Hochul has not taken a firm position on the legislation, but has noted that it is not part of her agenda.
The Senate’s one-house budget expresses support for “advancing tenant protections that align with the core principles of Good Cause Eviction.” The Assembly, on the other hand, does not mention it but does add $15 million for an expansion of statewide eviction prevention legal services, for a total of $50 million.
The HAVP would create a $250 million statewide program for those experiencing homelessness or at risk of eviction to pay rent via vouchers. The measure passed the Assembly housing committee in February, and both chambers funded it in their one-house budgets.
Last year, Hochul opposed a new housing voucher program, though her resistance to it was reportedly based on an inflated projection of its cost – roughly $6 billion annually – that did not match lawmakers’ demands.
14. NYCHA
Though the New York City Housing Authority has a $40 billion five-year capital need, its focus this year has shifted to its struggles with its operating budget because of plummeting rent revenue.
The governor’s budget proposal included no new capital or operating funds for NYCHA, even as lawmakers and housing advocates are pushing for increased assistance to cover rental arrears for tenants.
[Read: NYCHA Rent Arrears Crisis Shifts Budget Focus from Capital Needs to Operating Assistance]
[Read: NYCHA Officials Sound The Alarm at City Council Budget Hearing]
In total, NYCHA has tenant rent arrears of about $466 million from 73,000 households, up from $125 million in 2019. The authority has applied for $120 million in rental assistance for more than 31,300 households under the Emergency Rental Assistance Program (ERAP), a state program created during the pandemic using federal aid. But none of those payments have been approved since NYCHA tenants were placed at the bottom of the priority list for the program, and arrears for those tenants have grown to $240 million. ERAP funding has since been depleted.
NYCHA has asked for about $330 million from the state to help cover its rent arrears and to avoid fiscal crisis as it continues to dip into reserves to cover expected annual operating deficits.
The Senate’s one-house budget proposes adding the $389 million for ERAP, as well as another $350 million in capital funds for NYCHA in the coming fiscal year. The Assembly’s budget also proposes $385 million for statewide rental arrears assistance. It’s unclear how much of that amount would be earmarked for NYCHA tenants.
15. Cap-and-Invest
As part of her State of the State agenda, Hochul proposed a cap-and-invest program that would place a tax on carbon emissions from large polluters and fuel sellers. The executive budget estimates the corresponding Climate Action Fund will generate $1 billion annually from the tax, which would be used by the state to pay for energy rebates to consumers and businesses, and decarbonization efforts.
The Senate included the program in its one-house budget with more guidelines and guardrails for how the proceeds can be spent. The Assembly one-house budget did not include cap and invest language.
16. Gas Bans and Renewable Energy
Hochul added $5.5 billion for climate action in the executive budget bringing total spending to over $30 billion. That includes spending on energy affordability, emissions reductions, and clean air and water.
The capital plan includes financing $805 million over five years under the Environmental Bond Act, which voters approved last fall to authorize state borrowing up to $4.2 billion for environmental projects. That includes $100 million in fiscal year 2024.
[Read: How New York Will Implement the $4.2 Billion Environmental Bond Act Passed by Voters in 2022]
Hochul also proposed a ban on fossil fuel hook-ups in newly-constructed buildings starting in 2025 for some buildings and a plan to phase out the sale of heating equipment that burns fossil fuels. Both the Senate and Assembly one-house budgets included the ban on gas in new construction (with differences in the phase-in dates and other secondary changes), giving environmental advocates hope that the three parties will reach a deal in the final budget.
Both houses also included a measure to decarbonize state-owned buildings, including SUNY campuses, by 2040 – a proposal left out of the executive budget.
One point of division between the governor and State Legislature is the Build Public Renewables Act, which would require the New York Power Authority to build renewable energy power and phase out fossil fuel burning plants, along with certain labor standards for renewable projects. Hochul proposed a pared down version of the bill in her executive budget: it allows but does not require the NYPA to build renewable energy plants and leaves out some of the labor provisions included in the legislation.
The Senate's one-house budget includes the full Build Public Renewables Act, which the chamber passed last year and again this year. The Assembly has not passed the bill and did not include language around the New York Power Authority in its one-house budget.
The Senate's one-house budget includes a $500 million increase to the Environmental Protection Fund, while the Assembly added $435 million. Both houses added $100 million on top of the governor's $500 million proposed funding for the Clean Water Infrastructure Act, along with water quality measures in Suffolk County.
The Senate also included the Waste Reduction & Recycling Act, a measure proposed in Hochul's executive budget that would hold companies responsible for the environmental impact of the packaging they use. The Assembly did not include the bill but accepted the governor's proposed Department of Environmental Conservation budget, which includes staffing to support the program.
17. State Public Campaign Finance System
The Public Campaign Finance Board requested $14.5 million for administration and infrastructure to run the new state campaign finance system that includes public matching for small-dollar campaign donations; and $100 million for the matching funds pot.
Hochul's executive budget included $14.5 million to launch the new office and $25 million for matching funds, building on $10 million Hochul and the Legislature included in last year's budget. The PCFB and Hochul have said public matching payments are not expected to be made until the following fiscal year, which begins April 1, 2024, when that year's primaries for state legislative seats will be well underway.
State lawmakers approved the program in 2020, setting lower contribution limits and creating a public small-dollar match option for candidates running after the 2022 election cycle for statewide and state legislative seats. The new system is modeled on New York City's campaign finance system, which supporters say helps reduce the influence of large donors on elections.
In February, Spectrum News reported legislators were discussing delaying the start of the public matching program for two years over concerns about being able to fully fund the program. The Senate and Assembly one-house budgets included the governor's full proposal without new start dates.
[Read: Hochul’s Budget Offers Far Less Funding Than Requested by New State Public Campaign Finance Board]
18. Film and Television Tax Credits
Hochul's proposal to increase New York State's Film Tax Credit appears to have the support of the Senate and Assembly, which included the provision in their one-house budgets.
The credit is one of New York's largest industry subsidies. It currently offers a 25% credit of eligible production costs for movies and TV shows made in New York, running roughly $420 million a year. Hochul and legislative leaders want to up that subsidy to 30%, which would total roughly $700 million annually. Hochul is also seeking to expand the types of production costs that would be eligible for the tax credit, a proposal included in the Assembly's one-house budget but rejected in the Senate's.
The proposal is one of several major industry subsidies that Hochul is pushing – now with the backing of the two legislative majorities. That also includes expanding a tax credit for Broadway theaters from $200 million a year to $300 million. The Musical and Theatrical Production Tax Credit was created during the height of the pandemic to help struggling theaters cope with massive revenue losses that came from closing their doors. The Assembly and Senate each included the increase in their budget proposals, with the Senate extending the credit to off-Broadway theaters as well.
19. Belmont Racetrack Loan
Hochul and the Legislature appear to be aligned on a proposal to lend $455 million to the New York Racing Association to demolish and rebuild facilities at Belmont Park, an aging horse racing facility on Long Island. Both the Senate and Assembly one-house budgets included the funding, which Hochul proposed in her executive budget earlier this year.
The deal requires the New York Racing Association, the nonprofit operator of Belmont, to give up its lease for the state land on which nearby Aqueduct Racetrack sits in Queens, once the reconstruction is completed. In the process, horse racing at Aqueduct, which is also operated by the racing association, would be moved to Belmont and Aqueduct torn down, freeing up 100 acres of state-owned land adjacent to JFK International Airport, which some want to use for housing.
While some critics and watchdogs question investment in the declining horse racing industry and risk for New York taxpayers and using tax dollars to subsidize animal cruelty, proponents including the governor insist the plan would attract more economic activity, including tourism, to the area and open up opportunities to redevelop the valuable land under Aqueduct.
20. Cigarette Tax and Flavor Bans
In her State of the State agenda and executive budget, Hochul proposed increasing the state tax on cigarettes by a dollar a pack to $5.35 per pack, and banning flavored tobacco products, including menthol cigarettes.
The Senate and Assembly one-house budgets accepted the tax hike but omitted Hochul's flavor ban, which has become the subject of fierce lobbying by anti-tobacco groups, the tobacco industry, and some Black leaders on both sides of the debate.
The Senate also included a proposal of Hochul's to impose additional penalties on cigarette retailers that refuse Department of Tax and Finance inspections.
Still Other Issues to Watch:
There are a number of other areas where there seems to be space between the governor's proposals and the Senate and Assembly's one-house budgets, or negotiations in motion to make changes.
Changes to Marijuana Law: Just last week, Hochul proposed increasing civil and tax penalties for illegal marijuana sales as well as stronger enforcement powers for the Office of Cannabis Management and the Department of Taxation and Finance to shut down stores that sell marijuana without a license. State Senator Liz Krueger, who sponsored marijuana legalization in her chamber, recently told Gotham Gazette that three-way negotiations among the governor’s office, Senate, and Assembly were underway to add several enforcement mechanisms to the law.
Assembly Majority Leader Crystal Peoples-Stokes, the Assembly sponsor of marijuana legalization, and State Senator Jeremy Cooney have separately proposed changes to simplify how marijuana sales are taxed in the state.
Clean Slate Act: Criminal justice reformers are pushing for the passage of the Clean Slate Act, which would automatically seal conviction records, except for sexual offenses, for New Yorkers once they become eligible after time served and parole periods. The bill passed the Senate last year but failed in the Assembly, and this year the Senate included it in its one-house budget but the Assembly did not. Hochul has not supported it.
Universal Free School Meals: Legislators and advocates are pushing for about $280 million in state budget funding for universal free school meals across New York, where all students would be able to eat breakfast and lunch at their schools every day.
Freelancer Protections: After Governor Hochul issued an end-of-year veto of the Legislature’s attempt to expand protections for freelance workers, lawmakers reintroduced the “Freelance Isn’t Free Act” bill this year and hope to include it in the budget. The bill, modeled after successful legislation in New York City, would give freelance workers wage protections, including a right to contracts for their work, timely payments and a grievance redressal process.
When Hochul vetoed it, she said it would place an undue financial burden on the state Department of Labor to enforce, lending impetus for it to become part of budget negotiations.
[READ: After Hochul’s 2022 Veto, Lawmakers Reintroduce Bill to Protect Freelance Workers Statewide]
Farmer Tax Credits: Last year, the state expanded an investment tax credit for purchasing or upgrading farm equipment, and, in her budget this year, Hochul proposed making the credit refundable for five years. Both the Senate and Assembly have come out in support of that proposal.
Cost of Living Adjustment: Hochul proposed a 2.5% cost of living increase for human services workers, lower than the 8.5% increase sought by behavioral health advocates and included in the Senate and Assembly one-house budgets.
Unemployment Bridge Program: Immigrant advocates and some Democratic lawmakers and labor unions are pushing for the inclusion of a $500 million "unemployment bridge program" that would provide unemployment benefits to undocumented New Yorkers. The proposal was not included in the executive or one-house budgets but the Senate's resolution includes a review of options to expand traditional unemployment benefits.
Access to Representation Act: Immigrant advocates and lawmakers are also calling for the passage of the Access to Representation Act, which would provide the right to counsel in immigration court proceedings.
Increased penalties for attacks on retail workers: Amid the ongoing spike in retail theft, legislators have sponsored a bill that would make it a Class D felony and bail-eligible offense to attack a retail worker – the same level as an assault on a police officer or firefighter, for instance.
They have also sponsored measures to crack down on the online sale of stolen goods and to increase penalties for repeat shoplifting.
Adams’ proposed tax credit expansion: Mayor Eric Adams last week rallied with labor unions to push for a further expansion of the Earned Income Tax Credit and Child Tax Credit, after successfully urging the state to expand both last year. Under a proposed state bill, those with Individual Taxpayer Identification Numbers (ITIN) would be eligible for the credits, instead of the current eligibility for just people with Social Security numbers.
Working Families Tax Credit: Some lawmakers are also seeking a Working Families Tax Credit, which would provide families $500 per child and up to $1,500 for low-income households. Hochul's budget did not include the credit while Senate and Assembly one-house budgets included some elements of the proposed legislation.
Comptroller Oversight: Hochul's executive budget would exempt $12.8 billion from competitive bidding and comptroller oversight. State Comptroller Thomas DiNapoli said the provisions would harm the integrity of state procurement.
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by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
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by Ethan Geringer-Sameth, reporter, Gotham Gazette
@GeringerSameth @GothamGazette
Note - this article has been updated.
State Senator Liz Krueger, center-right, with other state leaders (photo: NYS Senate)
March 20, 2023 - Max Politics Podcast: Senator Liz Krueger on State Budget Negotiations
State Senator Liz Krueger, chair of the Senate finance committee, joined the show to discuss state budget negotiations with under two weeks before the April 1 deadline for a new spending plan.
Listen to the conversation and let us know what you think, on Twitter @TweetBenMax. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts at Max Politics.
Read more: Max Politics Podcast: Senator Liz Krueger on State Budget Negotiations
Gov. Hochul visits a hospital (photo: Kevin P. Coughlin/Governor's Office)
Hospital administrators and state regulators say a severe workforce shortage has stymied efforts to restore a majority of the 1,050 inpatient psychiatric beds removed across the state during the height of the pandemic in 2020.
Three years later, over 600 beds remain offline, according to the New York State Office of Mental Health (OMH), despite a $55 million infusion in last year's state budget and another $9 million to support the staffing pipeline.
The beds have become a focal point for Governor Kathy Hochul and Mayor Eric Adams, Democrats who have centered a continuum of mental health care and public safety services in their first-term agendas. The two have called for hospitals to increase their capacity to commit patients with serious mental illnesses on short- and medium-term stays, a complement to the 3,300 beds in state-operated psychiatric institutions.
The $55 million allocation, a combination of state and federal funds, supported higher Medicaid rates for inpatient psychiatric beds, bringing them closer to medical and surgical bed rates. That money has already been spent while the state awaits retroactive approval from the federal government, according to James Plastiras, an OMH spokesperson.
Even with the higher reimbursement rates, hospitals continue to struggle with adequate staffing, making it impossible to predict when the remaining 636 beds will come back into service. There are 5,780 inpatient psychiatric beds in health care facilities statewide; in total, the remaining beds would increase New York's capacity 11%.
"That money was intended to get psychiatric rates closer to paying for the cost of care, but the cost of care has become more expensive because of the workforce shortages," said Alison Burke, the Vice President of Regulatory and Professional Affairs at Greater New York Hospital Association, which represents roughly 280 hospitals and healthcare facilities in the region (including New York, New Jersey, Connecticut, and Rhode Island). "Getting staff costs more money now," she said.
Part of that cost spike is the result of recent contract negotiations with the New York State Nurses Association, Burke told Gotham Gazette, and ongoing negotiations with 1199SEIU, the state's largest healthcare workers union. But the biggest underlying problem is a labor shortage that was years in the making and compounded by the intensity and exhaustion of work on the frontlines of a pandemic.
"The workforce challenge is, I would say, the biggest obstacle to getting all of the beds and all of the necessary services back up and running right now," Burke said. "We could have a million beds back online, sheets ready, but we don't have the staff."
The bottleneck could pose an obstacle to Hochul and Adams as they attempt to deliver on key planks of their agenda. In October, the mayor, governor, and top city and state brass gathered at Grand Central Terminal to announce "Cops, Cameras, and Care," a campaign to make subways safer by pouring police, surveillance cameras, and mental health clinicians into the system. A month later, Adams announced a plan to step up the removal of people with severe mental illness from the subway, and expressed a desire for hospitals to increase the number of involuntary psychiatric commitments.
"You can remove people, but you also have to make sure that they get the treatment they need so they don't come back," Hochul said at the October 22 press conference, referring to inpatient beds.
"We need beds. There's no getting around that. We need beds," Adams told reporters in November. The extent of that need is still unclear: in 2022, police involuntarily removed at least 1,300 individuals from the subway, but officials have not said how many were ultimately admitted to a hospital or even met the clinical criteria for admission.
Current Plans
Hospitals have been on something of a spree in recent months, reinstating 214 beds since last fall, when Gotham Gazette reported 850 of the 1,050 beds remained offline after months of no progress. Of those newly restored beds, 70 were in New York City, including 33 at NYC Health + Hospitals (H+H), the city's public hospital network, according to OMH.
OMH would not give an estimate of when the full tally of offline beds would be restored. According to Plastiras, 80-90 more beds are expected online by April. Officials with H+H said the system intends to add 200 more inpatient psychiatric beds across the five boroughs by December.
H+H accounted for roughly a quarter of the shuttered beds statewide, Gotham Gazette has learned. At one point in 2020, the hospital system was among the most strained in the world due to COVID-19, converting any available space to intensive and emergency care. At the height of the pandemic, H+H facilities had between 250 and 260 psychiatric beds offline, according to OMH. H+H has never provided information on the number of psychiatric beds taken offline at the height of the pandemic, despite dozens of inquiries over several months.
"We are making large investments and working tirelessly on bringing these behavioral health beds online as fast as staffing and space configurations allow," wrote H+H spokesperson Stephanie Buhle in an email to Gotham Gazette. H+H has just over 1,000 beds online currently, she wrote, along with a range of outpatient and telehealth programs.
The Adams administration would not comment on the capital or operational needs involved in restoring beds, including how many staff H+H needs to hire. But at a City Council budget hearing on Tuesday, March 21, H+H CFO John Ulberg testified that the beds would cost between $650 and 700 million, and President and CEO Dr. Mitchell Katz said it would require a staffing ratio of seven nurses and 15 ancillary staff per bed.
Seventy-nine percent of H+H existing beds are occupied, Katz said.
Last year, Hochul included $9 million in the state budget for tuition assistance for psychiatrists and psychiatric nurse practitioners. That money is being spent on a rolling basis, and hospital administrators are seeking additional funds in this year's state budget, including funding for recruitment and retention efforts for social workers and other licensed mental health providers.
Outside of traditional hospitals, known as Article 28 facilities, Hochul's executive budget proposal for next state fiscal year, which begins April 1, includes $48 million for 150 new adult beds in state-operated psychiatric facilities, including 100 in New York City. These are in addition to 50 state-operated beds opened last fall in downstate psychiatric hospitals and separate from the effort to restore Article 28 beds.
Penalties for Hospitals
This year, Hochul is seeking legislation that would allow the state to fine hospitals $2,000 a day for failing to comply with the number of psychiatric beds outlined in their operating certificates.
"This legislation is necessary to implement the FY 2024 Executive Budget because it would support the re-opening of Article 28 inpatient psychiatric beds and provide $500,000 in revenue in FY 2024," reads a state memorandum of support provided by OMH.
Plastiras, the OMH spokesperson, would not say how many hospitals are operating below their mandated capacity but told Gotham Gazette the state was in touch with delinquent facilities about getting beds back online. Hochul’s executive budget is now the subject of negotiations with the two houses of the State Legislature, with a new state budget due by April 1.
"Bed counts are very fluid, and inpatient psychiatric and medical beds in hospitals may go offline for short periods of time for a variety of reasons, including construction, staffing shortages, etc.," Plastiras wrote by email. "The Article 28 facilities we contacted regarding offline beds have all submitted plans to return those beds to psychiatric use."
On January 10, the same day Hochul announced the proposed sanctions in her State of the State agenda, OMH and the state Department of Health issued a letter to hospital administrators with an ultimatum: they had until February 10 to restore all non-operational psychiatric beds or submit a plan to do so by April 1.
Hospitals appear poised to miss that mark. Plans submitted by providers indicate only 80-90 beds will come online statewide by April, according to figures provided by OMH after a Gotham Gazette inquiry. That would leave around 550 of the 1,050 psychiatrist beds yet to be restored.
The state letter threatens fines and other enforcement actions. Asked how the state planned to handle errant hospitals, Plastiras said the plans were still under assessment.
"We understand that healthcare providers are facing difficult issues, not the least of which is a nationwide shortage of healthcare workers," he wrote, noting the state's investment in the psychiatric workforce.
"Moving forward, OMH is working with hospitals to identify additional supports and resources that may be needed to reopen beds," Plastiras wrote. "To ensure that reopening plans are on-track, OMH will expand our monitoring of inpatient programs, particularly those with offline beds. If necessary, we will impose fines and sanctions on hospitals not working in good faith to reopen offline beds."
In a response letter, GNYHA President Kenneth Raske blamed bed levels on a shallow labor pool and continuously-low Medicaid reimbursement rates.
He wrote the boost in last year's budget accounted for a 20% increase in reimbursement rates but still left hospitals to find other sources to cover 45% of costs. It also only applies to patients covered under a type of Medicaid plan known as fee-for-service. But for much of the last decade, most Medicaid recipients have been moved over to a new system known as Managed Care. That leaves only one in five discharges benefiting from Hochul's rate increase.
The Assembly's one-house budget proposal rejects the increased penalty entirely, while the Senate's included it with additional protections for "attempts made in good faith to comply with applicable operating certificates and the law."
Asked about the proposal, Burke of GNYHA said hospitals are in regular communication with OMH and there are no indications the state is planning to issue fines. "These patients are in our emergency rooms if they're not in an inpatient bed when they require hospitalization. So everybody recognizes the need right now well exceeds the capacity, and people are making every effort to get the beds back online. And we all support that."
"We don't support our members getting fined," she added.
Note: This piece was updated with information provided by New York City Health + Hospitals at a City Council preliminary budget hearing on Tuesday, March 21.
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by Ethan Geringer-Sameth, reporter, Gotham Gazette
@GeringerSameth @GothamGazette
Ed Cox on Capitol Tonight
March 14, 2023 - Max Politics Podcast: Ed Cox Returns as New York Republican Party Chair
Newly-elected New York State Republican Party Chair Ed Cox, who previously held the role for 10 years (2009-2019), joined the show to discuss his plans for leading the state party, how to protect and build on Republican successes in 2022, and more.
Listen to the conversation and let us know what you think, on Twitter @TweetBenMax. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts at Max Politics.
Read more: Max Politics Podcast: Ed Cox Returns as New York Republican Party Chair
Treatment could be available for more defendants (photo: Michael Appleton/Mayor's Office)
State legislation to expand alternatives to incarceration for people with mental illness is gaining momentum in Albany amid debates over how criminal justice, public safety, and mental health care policy interact.
The Treatment Not Jails Act would require judicial diversion courts in every county of the state and expand the list of special circumstances that qualify a defendant to have their case heard outside a conventional criminal courtroom. Its sponsors say the program would offer a critical alternative to the traditional system of crime and punishment for people with serious mental health care needs, intellectual disabilities, and a host of other clinically defined "functional impairments."
The legislation has seen growing support in the State Legislature, where its sponsors are pushing for it to be included in their chambers’ one-house budget proposals due out the week of March 13. Governor Kathy Hochul has not taken a position on the bill as budget negotiations enter the final stages — a state budget is due by the April 1 start of the new fiscal year.
The debate over treatment courts comes at a time when jails and prisons, which house a disproportionate number of people with mental health needs, are seeing record violence and death.
Supporters argue the alternative court settings – which offer court-ordered treatment and supervision in lieu of incarceration – provide a safer and more constructive path to rehabilitation than jails. Opponents say the legislation is another progressive measure, like recent discovery law reforms, that could sap resources and hurt public safety.
"On the face of it all, it's easy to go back to that knee-jerk reaction of, 'Oh, it sounds like this is a get-out-of-jail-free card.' And it's not," said State Senator Jessica Ramos, a Queens Democrat and the bill's lead Senate sponsor, in an interview with Gotham Gazette. "It is actually making sure that folks are being seen by the court with the medical lens that their mental illness requires."
The bill has gained co-sponsors each legislative session since it was first introduced in 2020. It now has the official support of roughly a third of each legislative chamber, including both Democrats and at least one Republican in each house.
Spokespeople for Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie, both Democrats, did not return requests for comment on the legislation or the likelihood of it being included in one-house budget bills.
Court-mandated mental health treatment and involuntary psychiatric commitment have become a growing interest of city and state leaders, including Hochul and Mayor Eric Adams, two Democrats who have centered related policies in their public safety agendas.
Adams has put in motion an increase in involuntary removals of homeless New Yorkers with untreated severe mental illness from the streets and subways.
"We can no longer deny the reality that untreated psychosis can be a cruel and all-consuming condition that often requires involuntary intervention, supervised medical treatment and long-term care," he said when announcing the new policy in November.
He also advocated for the successful state-level expansion of Kendra's Law last year, which allows court-order treatment in civil cases where a person is deemed a danger to themselves or others.
A spokesperson for Adams said the Treatment Not Jails Act was under review.
"Mental health courts have an important role to play in our criminal justice system, strengthening public safety and ensuring that people get the treatment and support they need to maintain stability," the spokesperson wrote by email.
Each of the five boroughs currently has a mental health treatment court for a narrower population than is included in the Treatment Not Jails Act.
A spokesperson for Hochul said she would look at the legislation if it passed both houses.
New York has 233 special treatment courts for veterans, people with substance abuse disorder, families with a history of domestic violence, and people with mental health care needs, among others. The courts, which exist on an ad hoc basis throughout the state, require mandated treatment plans that could include counseling and medication along with other services like housing (the Office of Court Administration could not provide a breakdown of the courts' distribution across the state). Mental health courts often require a guilty plea before a defendant may become eligible for diversion from potential incarceration, according to the bill's sponsors.
The Treatment Not Jails Act would require each county to open up a treatment court and make any individual accused of a felony or misdemeanor eligible for consideration. The bill would require a clinical evaluation by a mental health professional to determine eligibility before a plea is made. The evaluation is shared with the defendant and their lawyer who may agree to share it with prosecutors and the court. To be diverted, the prosecution and defense must then come to an agreement based on the evaluation; otherwise either party may seek a hearing before a judge.
Prosecutors reached for comment said they support the spirit of expanding access to mental health treatment courts but indicated they were unsatisfied with the current language of the bill.
"The Office supports the goals of the bill and will be meeting with advocates and legislators in the coming weeks to discuss specific aspects of its language," wrote Emily Tuttle, a spokesperson and senior advisor to Manhattan District Attorney Alvin Bragg, in an email to Gotham Gazette. Shortly after taking office, Bragg opened a new division focused on special courts and alternatives to incarceration. His office declined to provide specifics about its concerns with the current bill language.
“We are deeply committed to increasing access to mental health treatment, and Brooklyn’s nationally recognized Mental Health Court has continually expanded the cases it accepts," reads a statement from Brooklyn District Attorney Eric Gonzalez's office in response to a Gotham Gazette inquiry. "We are working with the bill’s sponsors to prevent the serious unintended consequences that would arise if the legislation is enacted in its current form.”
The office did not provide details on what those unintended consequences could be.
An official familiar with treatment courts who requested not to be named because they were not authorized to speak on the record warned that the courts do not have the resources to conduct hearings and evaluations for the wider population that would become eligible for diversion under the bill. The official said the bill could result in unmanageable delays that might reduce the number of people who end up receiving mental health treatment.
A spokesperson for Queens District Attorney Melinda Katz said the office was analyzing the latest version of the legislation.
Public defenders have organized in support of the Treatment Not Jails Act. “Too often, our incarcerated clients with mental health and substance abuse issues languish in jail, denied treatment and cycled through the revolving door of Rikers Island,” said Alice Fontier, managing director at the Neighborhood Defender Service of Harlem, in a recent statement.
Prosecutors say they are still struggling to meet the demands of 2019 changes made to the state's discovery laws that tightened deadlines to turn over evidence to defense attorneys. Hochul has proposed more funding for that purpose in her executive budget.
"District Attorney’s offices spent a great deal of time establishing new mechanisms for discovery storage and exchange. Funding continues to be needed for additional staff and particularized staff training, new and updated technology, and expanded storage capabilities," the District Attorneys Association of the State of New York testified at a recent legislative budget hearing.
The state's 95 existing Adult Drug Treatment Courts will cost taxpayers $16 million in the next fiscal year, $15.2 million of which will pay for non-judicial court personnel with the remainder going towards training and drug testing, according to court spokesperson Lucian Chalfen.
The bill's sponsors estimate the Treatment Not Jails Act will cost the state roughly $15 million annually and argue it will ultimately save the state much more money by avoiding the cost of imprisonment. The Office of Court Administration, which runs the state court system, does not yet have a position on the bill, Chalfen said.
While Hochul has not opined on the legislation, her inclusion of an additional $15.7 million for alternatives to incarceration in her executive budget this year has given lawmakers hope.
"That is exactly the number for Treatment Not Jails," said Assemblymember Phara Souffrant Forrest, the Assembly's prime sponsor of the Treatment Not Jails Act, in an interview with Gotham Gazette. "That was very positive for us." The Assemblymember’s office will be meeting with the governor's team next week to discuss getting the bill into the final budget, she said.
Last year, Hochul and the Legislature allocated $15.7 million for alternatives to incarceration, ultimately awarding $17.1 million through the Department of Criminal Justice Services (DCJS), according to Janine Kava, a spokesperson for the governor's office and DCJS. The funding went toward pretrial release programs, employment-based services, and jail based "cognitive behavioral intervention," aimed at reducing recidivism upon release. Another $400,000 of that original allocation went to the state correction department, Kava said. In her executive budget for the fiscal year that begins April 1 of this year, Hochul doubled alternatives to incarceration spending to $31.4 million.
The governor and legislative leaders will negotiate the budget over the coming weeks, discussions that will intensify after the two houses pass their individual budget resolutions in the near future.
The newly-funded programs are yet to be determined, "but DCJS will build on what has worked well and ensure that programs are evidence-based and proven to work," Kava wrote in an email. "Governor Hochul will review the legislation if it passes both houses," she said of the Treatment Not Jails Act.
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by Ethan Geringer-Sameth, reporter, Gotham Gazette
@GeringerSameth @GothamGazette