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Governor Hochul Presents $227 Billion Executive Budget for Next Fiscal Year


Gov. Hochul presents budget details (photo: Mike Groll/Office of Governor Kathy Hochul)


Governor Kathy Hochul on Wednesday released a $227 billion Executive Budget, her proposal for the 2024 fiscal year, which begins April 1, including major initiatives on mental health, affordable housing, public safety, and investments in “the New York Dream” to support seniors, young adults, parents, veterans, entrepreneurs, and others.

“It's a thoughtful plan that furthers our progressive values and our priorities as New Yorkers, but also ensures fiscal responsibility,” said Hochul, a Democrat who just won her first term in the office, in her speech, delivered from the Capitol in Albany, where she was flanked by top aides. “Our $227 billion budget will include unprecedented investments in areas that will make a positive impact in people's lives, that'll make the New York Dream real, and as I said, make it safer, more affordable. more livable.”

Hochul’s budget, which will now become the focus of legislative hearings and negotiations with the Legislature’s two Democratic supermajorities, presented fiscal details behind the policy agenda she laid out in her State of the State speech on January 10. The overall state budget is $227 billion, an increase of $5.4 billion, or 2.4%, over the budget that was adopted last April. The proposed budget includes $125.2 million in state funds, an increase of $2.5 billion, or 2%, and $80.3 billion in federal operating funds, a decrease of $2.6 billion, or 3.1%.

Despite the after-effects of the pandemic, New York’s economy has performed better than expected. The state Division of Budget projects that tax receipts will be about $5.9 billion higher than projected in the mid-year budget update issued in November, leading to a total surplus of $8.7 billion by the end of the current fiscal year.

But tax collections that surged in recent years are expected to slow in the years ahead, and there are warnings of a recession looming on the horizon. With that in mind, about $5.3 billion of the end-year surplus will be used for deposits into state reserves over the next two fiscal years, bringing the level of reserves to 15% of state spending two years ahead of schedule. The reserves will stand at about $24 billion by the end of the current fiscal year, the highest level ever.

Most of the remaining surplus funds will be used for prepayments into next fiscal year and to address future budget gaps, according to a budget briefing book released by the governor’s office.

The state economy continues to face risks with jobs and wage growth slowing, a volatile stock market coming off a very bad 2022, and the Federal Reserve’s interest rate hikes to control inflation, which could cause a recession. Projected budget gaps remain significant for the years ahead – $5.7 billion in FY 2025, $9 billion in FY 2026, and $7.5 billion in FY 2027. According to the governor’s budget book, those gaps are largely because of an expected reduction of almost $21 billion in tax revenues between FYs 2025-2027.

Hochul is putting additional funding into the two biggest sections of the state budget, and without any of the cost controls watchdogs have called for: local education aid and Medicaid. Overall, the budget proposal includes $34.5 billion for school aid, an increase of $3.1 billion, or 10%, over the current budget. Hochul is proposing an overall Medicaid budget of about $103 billion, including $59 billion in federal funds, $34.8 billion in state spending, and $8.9 billion from local governments.

Among the major announcements in Hochul’s budget are a series of housing proposals under the governor's “New York Housing Compact;” proposed measures to stabilize the finances of the MTA; a $337 million plan to tackle gun violence; a $1 billion plan to help address the tens of thousands of migrant asylum seekers arriving in New York in the last year; $1 billion to increase mental health care beds; another $1 billion for other health care infrastructure; $1.3 billion for economic development initiatives; $5.5 billion to address climate change and environmental protection; and more.

The governor also proposed eliminating the charter school cap for New York City, a measure that she first vocally supported last year while debating her Republican opponent for governor, then-U.S. Rep. Lee Zeldin, and support for which she has not explained.

Among other especially notable specifics, Hochul omitted a proposed replacement for the expired 421-a affordable housing tax credit, which expired last year and she unsuccessfully tried to replace with a new program. But she did include a proposal to extend a deadline by four years for completed buildings to receive 421-a credits, from 2026 to 2030.

Though Hochul again emphasized that she will not raise income taxes this year, she did propose an extension of a temporary corporate tax increase first approved in 2021 that was meant to expire by the end of the year. That extension, through the end of 2026, would raise as much as $810 million in the 2025 fiscal year, according to the budget book.

The budget now sets the stage for negotiations with the state Legislature over the next two months before the next fiscal year begins. The State Senate and Assembly will present their own one-house budget resolutions outlining their respective priorities and will examine the governor’s budget over a series of hearings, while backroom negotiations proceed between the Legislature and Executive. It also triggers negotiations with other major stakeholders like Mayor Eric Adams, who gave a mostly positive initial reaction to Hochul's budget and will testify before the Legislature on his state budget priorities on February 15.

Public Safety
“Number one priority always has been keeping New Yorkers safe, full stop,” Hochul said, touting decreases in murders, shootings, and subway crime. In all, spending on public safety agencies will increase from $7.8 billion to about $8.1 billion, per her proposal.

Hochul outlined the details of a $337 million plan to reduce gun violence including doubling funding for the Gun Involved Violence Elimination (GIVE) program to $36.4 million for 20 police departments outside of New York City, $37 million for youth employment programs in GIVE jurisdictions, $1 million to help establish a dedicated Crime Analysis Center in New York City, $70 million for communities to respond to the aftermath of gun violence, doubling funding for alternatives to incarceration programs to $31.4 million, tripling funding for reentry services to $11.5 million, $40 million to help district attorneys implement discovery reform and $40 million for local district attorneys to hire hundreds of prosecutors, $20 million for pretrial services, and more.

Hochul also advanced her controversial proposal to further amend the state’s bail laws by removing the “least restrictive means” standard that judges are mandated to use when setting bail. The governor’s proposal would only apply to “serious offenders,” she said, while the law would remain the same for lower-level offenses that are bail eligible. “I will not turn our backs on the progress that was made, but conflicting language in the law leads to confusion and a lack of accountability for the judges to make their determinations,” she said. “So let's just simply provide clarity.”

Last year, Hochul held up the budget as she sought changes to bail laws to give judges more discretion, particularly in cases involving gun crimes and repeat offenders. This year, she said in a press conference after the budget presentation, the scope of her proposals is much narrower. “What is glaring to us and anyone who looks at it closely is that our law has two different standards in it and we're just focusing on that,” she said.

Housing
In her State of the State, Hochul announced a new “Housing Compact” to build 800,000 homes over the next ten years through a series of policy measures that include changes to zoning regulations, tax incentives, and housing creation targets for local and regional housing growth. The strategy is meant to supplement her $25 billion housing program enacted last year that will directly build 100,000 units of affordable housing over a decade. On Wednesday, she presented the many items from that strategy, including some proposals that she had floated last year but abandoned in the face of opposition.

Among the more controversial ideas is her proposal to essentially override localities that fail or refuse to meet housing growth targets, by mandating that developments be approved within a set time frame if they meet certain affordability criteria or allowing developers to initiate fast-track appeals to a new State Housing Approval Board or the courts. The measure is already being met with opposition from suburban lawmakers who rejected Hochul’s efforts to pursue much-needed housing growth last year.

Under her other proposals, the state will also promote “transit-oriented” development by requiring rezoning for higher density near MTA rail stations, streamline zoning regulations, increase the Floor-Area-Ratio (FAR) cap in New York City, expand the number of commercial buildings eligible for conversion to residential use (and new tax incentives to encourage that conversion), grant New York City the authority to legalize basement units, expand an existing property tax exemption to Accessory Dwelling Units (ADUs), create a new local option property tax exemption for multifamily affordable housing, and more.

In her speech, Hochul also outlined additional investments that included a $250 million Infrastructure Support Fund for projects that support housing creation, a $20 million Planning Assistance Fund for localities, a $40 million fund for lead inspection for rental properties, and more.

“The bottom line is, the more houses we build, you increase housing stock, the prices go down,” she said. “It's called supply and demand. And then New Yorkers get what they deserve: options, opportunities.”

Mental Health
The governor’s budget proposal increases spending on the state’s mental health and hygiene system to $10.5 billion, an increase of $709 million, or 7.2%.

In her speech and the budget book, Hochul outlined both expense and capital allocations for the state mental health system. That includes a $1 billion investment to bring 1,000 inpatient psychiatric beds into use, including 850 beds previously taken offline and 150 new beds; $10 million to expand school-based mental health services; an additional $15 million investment in housing for people with intellectual and developmental disabilities; $60 million to fund the expansion of the state’s crisis center network to support people who use the 988 Crisis Hotline; $10 million in grants for suicide prevention programs targeting high-risk youth; and more.

Hochul also announced several measures to tackle the opioid epidemic. “We'll examine every possible solution to this crisis, and treat people experiencing addiction as people who are human beings who just need our help,” she said.

The governor also announced a 2.5% Cost Of Living Adjustment (COLA) for human
services providers and $38 million to support minimum wage increases, including her proposal to index the minimum wage to inflation, for staff at programs run by state mental health agencies.

Other Health Care
In the budget, the governor included a new $1 billion investment in health care infrastructure, building on a $20 billion multi-year investment she first enacted last year. But the budget book notes that there is still uncertainty around growing Medicaid costs, which is the largest aspect of the budget. The state projects spending $1.6 billion more than expected on Medicaid because of increasing enrollment in the current fiscal year – enrollment is expected to be about 7.78 million people this year, according to the executive budget financial plan. “That's a concern of ours very much,” Hochul acknowledged at the press conference. “The escalation of costs for Medicaid, especially if you look at the outyears, it's rather dramatic.”

Enrollment is projected to fall to 6.9 million people in the next fiscal year, and 6.5 million people by the 2025 fiscal year.

The budget does include other major health care proposals including expanding the state’s Essential Plan coverage; expanding Medicaid coverage of preventative health services, expanding access to primary care; $379 million to provide a reimbursement rate increase to hospitals, nursing homes, and assisted living providers; and more.

Child Care
The governor’s budget continues the $7.6 billion, four-year child care investment she enacted last year, and includes several new child care initiatives such as instant eligibility for parents who already receive other public benefits, lower child care co-pays, increasing the income eligibility for families to receive free child care, and 12 weeks of fully paid parental leave for state employees.

Education
The executive budget's $34.5 billion for school aid is an increase of $3.1 billion, or 10%, over the current year. That increase includes a $2.7 billion increase in Foundation Aid, fully funding it for the first time, and a $392 million increase in other school aid programs. About $250 million of the increase in Foundation Aid will be dedicated to high-impact tutoring programs.

The growth in education funding includes $20 million for new Smart Scholars Early College High School (ECHS) or Pathways in Technology Early College High School (P-TECH) programs, $10 million over two years for the high school-college-workforce pipeline, and more.

One of the major investments is an additional $125 million to expand full-day prekindergarten programs for four-year-olds – for an overall $1.2 billion annually – which will create about 17,500 new seats. The new funding would bring the state to 95% of universal prekindergarten coverage, according to the briefing book.

The governor also proposed an elimination of the cap on charter schools in New York City. There are currently 460 charter schools permitted statewide, including a cap of 290 in New York City, which was met in 2020. Hochul wants to do away with the city’s cap, thus allowing dozens of unused charters to be awarded to operators in the five boroughs. Another proposal would permanently authorize the reissuance of so-called “zombie charters” that were previously issued but where the schools have closed sometime since 2015. This would make available another roughly 19-21 charters.

Charter school proponents hailed the governor’s support for eliminating the city cap.
“A budget is a reflection of priorities – and with this budget proposal, Governor Hochul has proven that she prioritizes the voices and needs of students and families first,” said James Merriman, CEO of the New York City Charter School Center.

But the proposal was quickly criticized by some legislators, including those who chair education committees or have focused on education issues. State Senators Shelley Mayer, John Liu, and Robert Jackson said in a statement that they were “deeply disturbed and disappointed” by the idea. “By removing the geographic restrictions for charter authorization, NYC could see an increase of more than 100 new charter schools. This will further increase the financial burden on NYC traditional public schools, taking much-needed resources away from schools serving the vast majority of our children,” they said.

The MTA
The MTA has been kept afloat through the pandemic with billions in federal aid. But the agency has continued to have structural deficits, both pre-existing long-term fiscal challenges and additional gaps given ridership still far below pre-pandemic levels. The MTA has previously predicted that it would need to take several steps, including increasing fares and tolls by 5.5% later this year, to meet its budget shortfall should the state not step in with additional aid.

On Wednesday, the governor finally addressed the MTA’s fiscal woes in her budget. Her plan for the agency includes finding $400 million in operating efficiencies, $800 in additional revenue through a marginal increase in the Payroll Mobility Tax, $500 million in increased contributions from New York City, and $300 million in one-time state aid. The governor also proposed that the MTA should receive a share of the $1.5 billion in licensing fees from the issuing of three new casino licenses in downstate New York and between $462 and $826 million in projected annual casino tax revenue that will begin to flow in 2026. In addition, the state is also putting $150 million towards more MTA safety personnel as part of the governor’s public safety plan also aimed at increasing ridership.

Pursuing $500 million from New York City for the MTA could prove a controversial ask of Mayor Adams and city-based legislators. “The city annually contributes approximately $2 billion to the MTA in direct and in-kind contributions and, while we recognize the significant fiscal challenges the MTA faces, we are concerned that this increased commitment could further strain our already-limited resources,” Adams said in a statement Wednesday.

New York City Comptroller Brad Lander similarly pushed back against the governor’s proposal. “Just as the shift to remote and hybrid work hit the MTA’s farebox revenues, so too it hit the City’s commercial property tax revenues and redistributed them to the rest of the region,” he said in a statement. “Rather than fare hikes, an increased share of payroll taxes, revenue from new casinos, and the implementation of congestion pricing are the right ways to replace farebox revenue and make long-overdue upgrades to ancient signal technology and repairs. The State should not stick the City with the bill to sustain our regional public transit system.”

Migrant Assistance
More than 42,000 migrant asylum seekers have arrived in New York City over the last year, according to estimates from Mayor Adams’ office, straining the city’s ability to provide shelter and other services. The mayor and other officials have repeatedly called for additional funding to meet those needs, mostly from the federal government but also from the state.

The governor, on Wednesday, seemed to heed that call as she proposed spending $1 billion on service and resettlement efforts. But her proposal involves the city, state, and federal governments each taking on a third of the costs. “The Budget creates a framework for the financial burden of such services to be evenly split between the levels of government,” the budget book reads.

Environment and Climate Change
Hochul announced several major climate programs and funding initiatives in her speech. Among them is a Cap-and-Invest program, which will cap emissions statewide and require major greenhouse gas emitters and heating and transportation fuel distributors to purchase allowances for their emissions. The emissions cap will be reduced annually, as the state attempts to reach the targets set under the Climate Leadership and Community Protection ACt of 2019, which sets the state on a path to cutting economy-wide emissions by 40% by 2030 and by 85% by 2050.

The governor also announced a $500 million investment in clean water infrastructure, $400 million for the state Environmental Protection Fund,  $400 for utility relief and energy retrofits for homeowners,  $200 million to improve state parks, and support for passage of the Waste Reduction and Recycling Infrastructure Act to increase recycling rates. The budget also includes the new Climate Action Fund, which will distribute more than $1 billion annually raised from the Cap-and-Invest program.

The governor also announced support for legislation to ban fossil fuel equipment in new construction, phase out fossil fuel heating equipment in existing buildings, and more.

Capital Budget
The budget also includes a $95 billion five-year capital plan to fund infrastructure such as the governor’s $25 billion housing program and the Department of Transportation’s $32.8 billion overall program.

It will fund new initiatives including $890 million for 2,150 new psychiatric residential beds for people with mental illness, $2 billion for CUNY and SUNY, $100 million to buy and renovate a new forensic laboratory, an additional $80 million for the renovation for a new State Emergency Operations Center, $1.7 billion for the reconstruction of the Wadsworth Center public health labs, $200 million for the EmPower Plus program to help low-income homeowners make their homes energy efficient, $500 million for clean water infrastructure, $1 billion for health care infrastructure, $200 million for parks and recreation, $845 million in new economic and community development funding, $455 million for the redevelopment of Belmont Racetrack, and more.

Reactions
“In the midst of an unprecedented affordability crisis, the Governor presented a state budget that continues to tax and spend without providing any real relief to struggling New York families and businesses,” said Republican State Senator Rob Ortt, the Senate minority leader, in a statement. “New York is facing a public safety crisis, and yet, there was no specific plan to fix the state’s disastrous bail laws. Instead of presenting solutions to make New York more affordable, this budget adds billions of dollars in new spending and imposes a new payroll tax that will hurt downstate New York businesses.”

Mayor Adams said in his statement that there were “many victories worth celebrating” in the governor’s budget, including her support for New Yorkers with serious mental illnesses, housing solutions, and public safety proposals.

But, he noted, “There are also areas of uncertainty that will require deeper review.” He said he wanted to see more detail on her proposal to aid with the asylum seeker crisis, and also expressed concern that her call for $500 million in additional city funding for the MTA “could further strain our already-limited resources.”

Kathryn Wylde, President & CEO of the Partnership for New York City, which represents the largest businesses in New York, praised the governor’s budget proposal, particularly the plans to address the state’s housing shortage and mental health crisis. “In this new era of remote work, and federal restrictions on foreign immigration, New York must focus resources on what it will take to make the city and state more affordable and attractive for workers and employers. The Executive Budget seeks to advance that agenda,” Wylde said in a statement.

Fiscal watchdogs praised the governor for adding more funding to reserves, even as they pointed to the economic risks that lie ahead.

State Comptroller Tom DiNapoli said in a statement he was “pleased” with the additional deposits to the rainy day fund. “Robust increases to reserves will better prepare us for future downturns and challenges,” he said, as he highlighted the uncertainty from high inflation, the state’s lagging job recovery and depleting federal aid.

He also expressed concern about the state’s debt burden, and has proposed a debt reform plan that he said will “impose meaningful limits on debt and ban backdoor borrowing.”

“While the reserve deposits help buttress New York against a recession,” said Andrew Rein, president of nonprofit Citizens Budget Commission, in a statement, “the budget also extends the temporary business tax surcharge and adds money for recurring programs without offsetting savings to support them in the future, setting the stage for potential future service cuts and unfortunately extending our nation-leading combined corporate tax rates.”

“The Governor’s proposal usually sets the floor in negotiations with the Legislature,” Rein added. “All New York State leaders should focus not just on today, but on protecting generations of New Yorkers from a future downturn and self-made fiscal crises arising from unaffordable spending or counter-productive taxes.”

There were a variety of other mixed reactions, including several advocacy groups who were disappointed with omissions from the governor’s budget.

Michael Zurlo, president of the New York State Association of Counties, took issue with a proposal in the budget that would allow the state to pocket Enhanced Federal Medical Assistance Program (eFMAP) funds meant for localities, shifting a $1 billion burden to local taxpayers. "At a time when New York is facing an affordability crisis, the last thing the Governor should do is burden local taxpayers with more costs that will drive up the cost of homeownership and rent, increase business expenses and make New York more unaffordable," he said in a statement.

“Governor Hochul’s executive budget for FY24 makes some strides but does not go far enough to meaningfully support immigrant New Yorkers, at a time of unprecedented need in our state,” said Murad Awawdeh, Executive Director of the nonprofit New York Immigration Coalition, in a statement. He particularly pointed to failure to fund legal services for immigrants in immigration court and to expand health coverage regardless of immigration status.

Reinvent Albany, a good government advocacy group, pointed to several issues with the governor's budget including, but not limited to, insufficient funds for the new public campaign financing program, no policy improvements or funding increases for the Freedom of Information Law process, and increased business subsidies that have failed to work in the past. "We are dismayed that the Governor is doubling down on billions in totally discredited business subsidies while cutting and freezing other state agencies and programs. Either her advisors are badly misinformed or her administration is totally cynical and swimming in pay to play," the group said in a response. 

They also noted that some questions remain unanswered. "Unfortunately, the Governor does not clearly show the public the high future cost of her proposals like increasing the Film/TV subsidy to $700 million a year, nor answer big questions like how the State is paying back the $9 billion federal Unemployment Insurance loan," they said. 

The New York League of Conservation Voters praised the governor's many climate and environment-related proposals including a new Cap and Invest program, investments in public transit, the Waste Reduction and Recycling Infrastructure Act, banning emissions in new construction, funding for energy affordability and home retrofits, and more. "The Governor’s 2023 budget proposal is a forward-thinking approach to addressing the pressing environmental challenges we face. We look forward to working with the governor and state legislature in the coming year to see these priorities to fruition," the group said in a statement. 

Among the items that weren’t in the budget was a measure to allow a “vacancy reset” for rent-regulated apartments that have been unoccupied and are in need of major repairs. New York City landlord groups, led by the Community Housing Improvement Program, say that the proposal is crucial to fund necessary repairs to thousands of dilapidated vacant units. 

"CHIP is having productive conversations with the governor's office and dozens of state lawmakers as we work to find a solution that would bring vacant rent-stabilized apartments back online,” said Jay Martin, Executive Director of CHIP, in a statement. “While a fix was not in the governor's initial budget proposal, we are optimistic that one will be in the final budget that passes.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note - this article has been updated with a section on the governor's climate proposals and additional reactions to her budget. 

What's Next for New York's New State Campaign Finance System?


Voters at the polls (photo: Michael Appleton/Mayor's Office)


New York State's new public campaign finance program is preparing to award as much as $100 million in matching funds over the 2023-24 election cycle when the entire State Legislature will again be on the ballot.

The bi-partisan Public Campaign Finance Board, part of the State Board of Elections, is seeking $114.5 million in the next state budget to fund the new voluntary matching program during its first election cycle. Most of the funding would go toward candidate campaigns who meet requirements for public matching dollars, while it would also help the organization grow into a fully-fledged agency of 118 staff members.

The program, which lawmakers passed in 2020 and went into effect immediately after the general election this past November, lowers limits on individual contributions to statewide and state legislative candidates, and establishes various public matches on in-state or in-district donations between $5 and $250. The program is somewhat modeled after New York City's lauded public funds program. It is intended to increase the influence of everyday campaign donors against the massive sums that mega-donors and SuperPACS pour into elections.

Governor Kathy Hochul is set to present her executive budget on Wednesday, which will tee off two months of negotiations with the State Legislature ahead of the April 1 start of the next fiscal year. Hochul, a Democrat just elected to her first full term, raised record sums under the old system, with its higher contribution limits and no public match.

"Governor Hochul included funding for the public campaign finance program in her first budget and we will release details of the Executive Budget later this week," wrote spokesperson Hazel Crampton-Hays in an email to Gotham Gazette. Hochul made no mention of the new program in her State of the State address in January or the accompanying 275-page agenda booklet.

Last year, Hochul and the Legislature allocated $20.6 million to the program, including $10 million for matching funds, which advocates for the program saw as a gesture of support for the newly passed system. That budget gave the Public Campaign Finance Board's seven members the authority to hire 64 staffers. The board’s membership includes the four members of the bipartisan State Board of Elections and three commissioners appointed by Hochul, the Legislature's Democratic majority, and the Republican minority. That included bi-partisan co-executive directors, deputy directors, and counsel, as well as auditors, candidate liaisons, administrators, and enforcement staff, according to a State Board of Elections spokesperson.

The Public Campaign Finance Board has been busy conducting training for candidates, registering campaign committees, and setting regulations.

Now it is pivoting from laying the groundwork to launching the program.

Ten candidates have already registered committees for the 2024 state legislative elections. For the 2026 statewide elections, the lone registrant is Comptroller Thomas DiNapoli's campaign.

In a budget resolution passed in December, the Public Campaign Finance Board approved the $114.5 million budget request, which would cover personnel, capital spending, and a $100 million public matching fund. The Public Campaign Finance Board "has reviewed private reports and conducted internal forecasting" to reach the $100 million estimate for payments in the following fiscal year, according to the resolution.

The board is also exploring software and other infrastructure to support the hundreds of candidates running for governor, lieutenant governor, attorney general, comptroller, and the 213 seats in the State Legislature. More training resources, including a handbook for candidates, are coming soon, according to the Public Campaign Finance Board website.

Joanna Zdanys, senior counsel at NYU Law School's Brennan Center for Justice, urged Albany leaders to include the Public Campaign Finance Board’s full request in the state budget.

“The $114.5 million that the Public Campaign Finance Board has requested is a reasonable down payment on a stronger, more inclusive democracy for New York," said Zdanys, in a statement to Gotham Gazette.

"The funding will help the PCFB to assist campaigns in participating and complying with the voluntary program, including by hiring additional candidate liaisons on staff and implementing software improvements," she wrote.

The Public Campaign Finance Board has yet to publish a calendar of payment dates and matching claims schedules for the 2024 cycle. According to the State Board of Elections, candidates in the program will use the same filing schedule as non-participating candidates, with the addition of periodic required filings in March of 2024.

Candidates for statewide office can receive a 6-to-1 match for every in-state contribution between $5 and $250. For example, a qualifying $5 contribution would give a candidate $30 in matching funds.

Candidates for state legislative offices may receive between 12-to-1 matches and 8-to-1 matches for qualifying small-dollar contributions, depending on the size of the donation up to $250. Donations from corporations, lobbyists, and campaign vendors are not eligible to be matched, but there is no barrier on matching donations from people with state business, unlike New York City's program. The campaign finance law sets qualifying thresholds for who is eligible to receive public funds and limits on how much they can get.

In order to qualify, candidates for governor must raise $500,000 from 5,000 New York donors. Candidates for comptroller and attorney general must raise $100,000 from 1,000 in-state donors. Candidates for State Senate must raise $12,000 from 150 in-district donors and Assembly candidates have to take in $6,000 from 75 in-district donors.

Fair Elections for New York, a coalition of hundreds of organizations including the Brennan Center, also called on Hochul to fulfill the Public Campaign Finance Board’s budget request.

"Candidates and voters alike will need to learn how the matching system works and how to participate, and the agency must have funding for the staff and infrastructure to make that possible," the group wrote in a statement in December. "These funds will also be essential for candidate and small donor confidence in the program’s viability."

Two weeks earlier, State Comptroller Tom DiNapoli and State Board of Elections Commissioner Douglas Kellner, both Democrats, joined members of the coalition for a rally at New York City Hall to bring attention to the launch of the new system. “New York’s new public campaign finance program will eliminate barriers and level the playing field for good, qualified people to run for public office,” DiNapoli said at the time. “It will help get big money out of elections and better ensure New Yorkers are put first."

The Senate and Assembly Democratic majorities did not return requests for comment on funding the new program.

The Legislature's Republican minority leaders balked at the PCFB's funding request. “It comes as no surprise that New York’s public campaign finance system is going to be expensive," said Assembly Minority Leader William Barclay in a statement to Gotham Gazette. "Taxpayers should not be forced to fund political campaigns. They don’t need their money being spent on political consultants, mailers or advertisements. I’ve been opposed to this idea from the beginning, and if it comes with a $114.5 million price tag, it gets even less appealing.”

"While New Yorkers endure a crime and affordability crisis, Albany Democrats are focused on forcing taxpayers to foot the bill for their political campaigns," Senate Minority Leader Robert Ortt said in a statement.

On Monday, Brennan Center and the national government transparency group OpenSecrets published a study applying the parameters of the new system to the most recent 2022 elections. The study estimated the public match would have increased the share of small donations (less than $250) in state legislative races from 11% to 67% of all donations. For state races, that number could increase from 6% to 41%.

The researchers found that the 200 biggest contributors to candidates in 2022 gave nearly $16 million in donations, more than the 206,000 individuals who gave donations of $250 or less. Those sums are also dwarfed by the tens of millions of dollars in outside SuperPAC spending.

Citizens Action of New York, a progressive grassroots advocacy group and a member of the Fair Elections coalition, has conducted trainings to get the word out. "Our trainings raise awareness about the PCFP [Public Campaign Finance Board] and encourage candidates to opt into this groundbreaking program," wrote organizer Karen Wharton, in an email to Gotham Gazette. "Information is key."

Ben Weinberg, director of policy at the good government group Citizens Union, another coalition member, noted that participation in New York City's program has become "ubiquitous among new candidates and incumbents of all backgrounds and parties."

The progressive Working Families Party, which endorsed Public Advocate Jumaane Williams against Hochul in the Democratic gubernatorial primary last year, where he was massively out-raised and -spent, is also backing the $114.5 million request in its legislative agenda this year.

“New York can counteract the corrosive influence of dark money and empower everyday New Yorkers through its new small donor matching program," wrote WFP Director Sochie Nnaemeka, in a statement in January. "To ensure the long-term success of the program, we’re calling on our state leaders to allocate the $114.5 million requested by the Public Campaign Finance Board to sustain this groundbreaking public financing system."

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by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

Read more by this writer.

Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.

NYCHA Repeatedly Missed Local Hiring Requirements, Costing Residents Jobs and Income


Work at NYCHA (photo: Demetrius Freeman/Mayoral Photography Office)


This article is published in partnership with New York Focus
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When Hurricane Sandy landed in New York City in 2012, it hit public housing hard. The sprawling Red Hook Houses, on the Brooklyn waterfront, lost power for weeks. And the recovery was slow: major renovations didn’t start until almost five years after the storm. When the federal dollars finally came in, though, they spelled a big economic opportunity — more than $500 million worth

“I saw the money as an opportunity for the neighborhood to eat,” said Karen Blondel, a longtime resident and tenant advocate at Red Hook Houses. That promise was backed up by a law known as Section 3, which requires a portion of jobs created by federal housing funds to go to low-income local residents. 

But that’s not how things played out. “When I looked out the window at the actual workers, none of them live in public housing,” Blondel said, speaking to New York Focus shortly before the 10-year anniversary of Sandy. 

Data provided by the New York City Housing Authority (NYCHA) to federal authorities bear out her concern. 

Annual reports NYCHA submitted to the U.S. Department of Housing and Urban Development (HUD) from 2016 to 2020 — obtained by New York Focus through a freedom-of-information request — show that the authority has often missed its Section 3 targets by large margins, particularly when it comes to construction and renovation work.

“To see such a huge job and not see as many people as I thought should have been working or getting training was very disappointing,” Blondel said of the Red Hook restoration. 

Until late 2020, Section 3 held that — “to the greatest extent feasible” — at least 30 percent of workers NYCHA hired should be low-income local residents, with public housing tenants getting priority. Similar benchmarks applied to outsourced work: Section 3 specified that at least 10 percent of construction contracts, and 3 percent of non-construction contracts, should go to qualifying Section 3 businesses. 

A Trump administration rule change in late 2020 loosened those criteria, shifting the benchmark to 25 percent of labor hours for all projects and removing the explicit preference for public housing tenants. But for the period covered by NYCHA’s reports — the most recent the authority was able to provide — the earlier criteria were in place. And NYCHA, in many cases, failed to meet them. 

From 2016 to 2020, no more than 0.3 percent of NYCHA construction contracts went to Section 3 businesses in any given year. NYCHA also fell afoul of the targets for direct hiring, despite starting off on a strong foot. In 2016 and 2017, it reported that virtually all the workers it hired for repairs qualified under Section 3. The next year — as overall hiring jumped — the Section 3 share plummeted to just 16 percent. It continued to decline through 2020. 

Some tenant leaders say they’re not surprised NYCHA has missed its targets.

“I believe it to be a steady doughnut” — a zero, said Manny Martinez, resident council president for South Jamaica Houses, of the authority’s Section 3 contracting rate. NYCHA’s self-reported figures for construction contracts match that description. 

Martinez has lived in the South Jamaica development nearly his whole life, and feels residents like him have been robbed of economic opportunities they were promised under Section 3. Had NYCHA met its targets, nearly $250 million more in contracts would have gone to local residents over five years, according to New York Focus analysis of the authority’s reports. 

“That investment alone…would have made these communities much different than what we currently are,” Martinez said.  

New York City Council Member Alexa Avilés, chair of the Council’s public housing committee, said she has heard similar concerns from many residents.

The figures NYCHA reported “are not a surprise, but they are still upsetting,” she said. 

“The mandate is right,” Avilés continued. “The public dollars should be supporting the training and hiring of residents of public housing...There should be real opportunities there that are being squandered.” 

NYCHA said it is taking steps to hire more residents, despite a long list of constraints. 

“NYCHA is committed to providing employment and training opportunities to public housing residents under the Section 3 initiative and have made several improvements… to meet this goal,” said spokesperson Nekoro Gomes by email. “HUD and the Federal Monitor have both recognized the effort we’ve put in to improving capital project delivery and these measures will serve to improve the capacity of this vital program.” 

Gomes highlighted the Section 3 rates NYCHA reported for day-to-day operations and non-construction contracts, which usually met or exceeded the HUD benchmarks. 

But “capital” work — meaning one-time renovations or repairs — was by far the biggest source of new jobs, and NYCHA’s reported numbers suggest that efforts to hire within its own community slipped down the list of priorities.

In part, NYCHA’s trouble keeping up with Section 3 reflects another urgent need: an enormous, and mounting, backlog of repairs. Entire developments have gone days or even weeks without heat or hot water; months without cooking gas; and years without remediation of hazardous lead, mold, and asbestos. 

“They’re just floundering trying to do what they can to keep the buildings running,” said Iziah Thompson, senior policy analyst at the Community Service Society (CSS), an advocacy and research nonprofit that often focuses on NYCHA. “In the ideal world, you want them to be a provider of housing and a provider of job training. But [they] did the housing part first, I think, and I don’t blame them for focusing on that.”

The sharp drop in NYCHA’s Section 3 hiring rate in 2018 partly reflects a surge in hiring overall, essentially of construction and building trades workers needed to address those long overdue repairs. Between federally funded Sandy recovery efforts and general repairs required under a 2019 agreement with HUD, NYCHA hired thousands of workers. 

That may have gotten more repairs done — but rarely by tenants themselves. And jobs remain an equally pressing need for many public housing residents.

NYCHA developments and their surrounding neighborhoods have some of the highest unemployment rates in the city, which in turn faces higher unemployment than the country as a whole. In sections of East New York and the South Bronx where NYCHA developments are most concentrated, Census five-year estimates put unemployment at 15 percent or more. The city average is half that

Unemployment rates within NYCHA developments may be even higher. CSS’s latest complete survey of public housing residents, conducted in 2021, found that some 22 percent were out of a job, with the highest rates among Black and Latino residents. 

If Section 3 had been implemented to its full extent when big federal funds came in, the picture would look much different, said Keith Swiney, president of the Section 3 compliance firm Motivation Inc. and a national expert on the law. 

“You’d have residents riding around in Bentleys right now,” Swiney said. 

Section 3 had its origins in the Housing and Urban Development Act of 1968, a capstone of the civil rights era. The law sought not only to provide low-income people with decent housing, but to give them jobs building and maintaining those homes — the key goal enshrined in Section 3. 

“Public Works, Not Charity: Black Houses, Black Jobs,” read the title of one article about the law, published that summer in Commonweal magazine and reproduced in the congressional record

Though Section 3 has been tweaked in the decades since, its core principle stands: housing authorities and developers that receive federal subsidies must make their best efforts to ensure that a portion of the jobs they create go to low-income local residents. 

The country has never truly delivered on that principle, Swiney said. Agencies that go above and beyond the law’s mandate are a rare exception. But if anyone should be meeting their targets, he said, it should be NYCHA. As the country’s largest public housing agency, it has the power to set a national example.  

Swiney cautioned that NYCHA’s self-reported numbers should be taken with a grain of salt: the 100 percent Section 3 hiring rate it submitted to HUD in 2016, for example, was likely inflated by faulty accounting. On the flip side, the authority may actually have under-reported how many of its construction contracts qualified under Section 3, because it didn’t have the means to fully track that workforce. 

But the big picture remains the same: “What those folks didn’t get is actually a very palatable amount of economic lift,” Swiney said. 

Sandy was a case in point. In Red Hook, the lion’s share of the work went to companies like Adam’s European Contracting, Inc., a Greenpoint-based firm. According to a tracker published on NYCHA’s website, the company was awarded one of the single largest public housing contracts of the last decade — $380 million — for its restoration work in Red Hook, and more than $900 million altogether for NYCHA work since 2013. 

Adam’s did not respond to requests for comment. Its website notes that it is a woman-owned business, founded by a Polish immigrant, and that it works with a variety of unions to supply labor. 

Indeed, Section 3 is far from NYCHA’s only hiring criteria. The authority has also signed a project labor agreement (PLA) with the New York City Building and Construction Trades Council (BCTC), which requires that contractors hire almost all of their workers through union hiring halls. Martinez, the Queens tenant rep, said NYCHA has used this as an “excuse” to not bring more of its own residents into the fold.

“If these unions are demanding 100 percent union requirements, then either the union or the contractor has to start making room for these unqualified persons to get trained,” he said.

Swiney, the consultant, said there has historically been “a gigantic conflict” between Section 3 and organized labor. 

BCTC president Gary LaBarbera strongly disputed this characterization. 

“We do not view the PLA as an impediment, but as an opportunity,” LaBarbera said by email. “While labor unions do not hire workers directly, we use the PLA to ensure every worker on the job receives the same rate of pay, the same level of benefits, and the same security and protection as any other worker performing the same craft.” 

LaBarbera stressed that the building trades have worked with NYCHA to provide training and apprenticeships to residents, offering them a path to the middle class and promoting safety on the job. 

But Martinez said those opportunities have been “minuscule.” Thompson, of CSS, agreed that training opportunities have been inadequate, in part because tenant reps have not gotten a seat at the table when NYCHA negotiates collective bargaining agreements. 

Another hurdle arises from the way NYCHA carries out repairs: typically, piece by piece, focusing on elevators in one instance and roofs the next, for example. That need for specialized workers makes it all the more complicated to ensure that training syncs up with job openings. 

That could change if NYCHA were to undertake more comprehensive retrofits, Thompson said.

“The potential for a huge jobs program is there. The workforce is obviously there. But the case has to be made,” he said. 

The controversial Preservation Trust approved by state lawmakers last year could offer a test case: it promises some of the first full-scale retrofits to NYCHA’s buildings outside of the RAD-PACT system, which transfers buildings to private management. Better yet would be a direct infusion of federal funding, Thompson said — but with Build Back Better long dead and Republicans in control of the House, that can’t be counted on any time soon. 

In the meantime, the city and state both need to step up to make sure that NYCHA residents get both the repairs they need and the jobs that come with them, Avilés said. 

“We have to walk and chew gum at the same time,” she said. “While yes, we have to prioritize, we have limited resources — we cannot ignore one side of the ledger for the other. The residents deserve both.”

********
This article is published in partnership with New York Focus

After Second Legislative Passage, New York State Equal Rights Amendment To Go Before Voters in 2024


Gov. Hochul signs abortion rights legislation (photo: Governor's Office)


Voters in the fall of 2024 will have a chance to enshrine civil rights protections for women, LGBTQ people, and abortion access into the state constitution after lawmakers on Tuesday pass the New York State Equal Rights Amendment for the second time.

If approved by voters, the state constitution will for the first time prohibit discrimination on the basis of ethnicity, national origin, disability, and sex, "including pregnancy and pregnancy outcomes, sexual orientation, gender expression.” The amendment's sponsors say those protections include reproductive rights, which would add New York to the minority of states that include access to abortion in their highest governing documents.

Though there is that final step to go, the victory for women's and LGBTQ rights advocates comes just after the 50th anniversary of the Supreme Court’s Roe v. Wade decision and 100 years after Congress first introduced the Equal Right Amendment for women to the U.S. Constitution, which has never been ratified

New York would be part of a growing number of states to adopt an ERA in recent years. The amendment saw renewed interest last year, after the U.S. Supreme Court struck down Roe and made abortion a top issue in state and federal elections across the country. The court’s conservative majority opinions have also raised concerns that the body may be open to reconsidering other established rights, including marriage equality and obtaining contraception. Twenty-two states have adopted some form of ERA, according to the Brennan Center for Justice, double the number in 2019.

The amendment would go further than the federal Equal Protections Clause by protecting against actions that have a discriminatory effect, regardless of intent, "thus providing a critical legal tool to dismantle acts that in effect perpetuate and/or result in inequality," according to a memo from State Senator Liz Krueger, a Manhattan Democrat and the resolution's sponsor. The amendment would be "self-executing," meaning it wouldn't require further implementing legislation in order to enforce it, if it is passed by voters this fall. That was a point of contention in previous iterations of the resolution and one of the reasons the State Senate and Assembly failed to agree on an ERA before 2022.

“On what would have been the 50th anniversary of Roe v. Wade, the Senate Majority is delivering on the promise to pass for the second time the Equal Rights Amendment to ensure that New Yorkers get the opportunity to codify abortion in our state Constitution, and afford equal protection from discrimination to women, LGBTQI+ individuals and many more New Yorkers," said Senate Majority Leader Andrea Stewart-Cousins, the first woman and first Black person to lead the chamber, in a statement.

"We will continue to focus on protecting our reproductive rights and enhancing protections for our abortion providers while expanding access to the full gamut of reproductive health services," Stewart-Cousins added.

The resolution is part of a reproductive rights package to pass in the Senate, which includes an abortion access grant fund called the Reproductive Freedom and Equity Program. With the exception of the ERA, the bills in the package either have yet to be introduced in the Assembly or remain in committee.

"Today, we passed the Equality Amendment for the second time, which, if approved by the people, would enshrine in our constitution expanded protections for the civil rights of New Yorkers and ensure that no one is denied the opportunity to fully participate in society on the basis of their identity," Assembly Speaker Carl Heastie said in a statement.

"Women have waited far too long to be included in our State Constitution,” Senator Krueger said in a statement, “but so have LGBTQ people, people with disabilities, Latinos, and everyone who has faced discrimination based on characteristics that are beyond their control.”

Assembly Member Rebecca Seawright, another Manhattan Democrat and the resolution's prime sponsor in her chamber, echoed that sentiment. "We are closer than ever to enshrining a woman’s right to choose and equality protections against discrimination in the most important governing document of our state," she said in a statement to Gotham Gazette.

“While New York has a robust set of anti-discrimination statutes, our state Constitution is inadequate when it comes to ensuring equality,” said Donna Lieberman, executive director of the New York Civil Liberties Union (NYCLU), in a statement to Gotham Gazette. “Next November, New Yorkers will be able to demand the lasting protections of a constitutional amendment that would prohibit discrimination against groups who have been historically targeted."

The fervor that erupted last year around the overturning of Roe and other rulings by the conservative Supreme Court pushed the Legislature's Democratic supermajorities to act quickly to come to an agreement on its provisions in the waning days of legislative session last year.

State constitutional amendments must be passed in two consecutive legislative terms and then be approved by voters in a referendum. Tuesday's vote marks the ERA's second passage. New Yorkers casting ballots in the fall of 2024 will be able to vote to approve or disapprove the ERA.

Democrats' have had a mixed record on ballot questions in recent years with the passage of recent environmental protection measures but failure of high profile electoral and redistricting amendments. Lawmakers are expected to put the question on the ballot in the fall of 2024, seeking to avoid leaving the ERA’s fate up to voters in the off-year 2023 election, where there will be few races on the ballot, turnout will be lower and approval less certain.

2024 will be a high-turnout presidential election year, with many other races on the ballot as well.

"We will enshrine these rights, not just in law, but in the Constitution of the State of New York with ERA, and we're going to do it again," Governor Kathy Hochul said at a press conference organized by Planned Parenthood in the Legislative Office Building in Albany ahead of the vote Tuesday. "We're not going to finish until we get that over the finish line. We're not going to stop."

Hochul, New York's first female governor, included passing the ERA in her State of the State agenda this year along with other protections for people seeking abortions. Those would include personal data protections for abortion seekers, authorizing pharmacists to prescribe abortion medication and contraception, and allowing SUNY and CUNY health care centers to provide medication abortions.

"Here in New York, we will continue to take bold measures to protect the rights of New Yorkers, and I applaud the New York State Legislature for taking another crucial step toward enshrining the Equal Rights Amendment into the state constitution," the governor said in a statement after the resolution passed Tuesday. "Last year, I was proud to convene an Extraordinary Session of the legislature that led to first passage of this historic amendment, and I am grateful the amendment is on its way to being presented to voters next year."

***
by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

Read more by this writer.

Max Politics Podcast: Roberto Ramírez on Hector LaSalle's Nomination for Chief Judge and Latino Representation in New York


A rally in support of Hector LaSalle for Chief Judge (photo: Don Pollard/Governor's Office)


January 24, 2023 - Max Politics Podcast: Roberto Ramírez on Hector LaSalle's Nomination to Become Chief Judge and Latino Representation in New York

Roberto Ramírez — a founding partner and political strategist at The MirRam Group, a former Assemblymember, Bronx Democratic Party leader, and advisor on Freddy Ferrer's mayoral campaigns — joined the show to discuss Hector LaSalle's nomination to be the next Chief Judge of New York, Latino representation at the highest levels of government, 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: Roberto Ramírez on Hector LaSalle's Nomination for Chief Judge and Latino...

Max Politics Podcast: The Chief Judge Fight for 'The Court New York Deserves,' with Peter Martin


The Court of Appeals (photo: Governor's Office)


January 23, 2023 - Max Politics Podcast: The Chief Judge Fight for 'The Court New York Deserves,' with Peter Martin

Peter F. Martin, a lead organizer with The Court New York Deserves coalition, joined the show to discuss the push for a progressive next Chief Judge of New York, the Hector LaSalle confirmation battle, and what comes next.

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: The Chief Judge Fight for 'The Court New York Deserves,' with Peter Martin

Max Politics Podcast: State Senator Jessica Ramos on Hector LaSalle, the Minimum Wage, & More


State Senator Jessica Ramos (photo: NYS Senate Media Services)


January 19, 2023 - Max Politics Podcast: State Senator Jessica Ramos on Hector LaSalle, the Minimum Wage, & More

State Senator Jessica Ramos - a Queens Democrat, labor committee chair, and member of the judiciary committee - joined the show to discuss her vote against confirming Hector LaSalle to be the next Chief Judge, her efforts to increase the minimum wage, 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: State Senator Jessica Ramos on Hector LaSalle, the Minimum Wage, & More

What Wasn't in Hochul's 2023 State of the State Agenda


Gov. Hochul delivers her 2023 State of the State (photo: Don Pollard/Governor's Office)


In her State of the State speech last week, Governor Kathy Hochul, a Democrat, outlined her agenda for the year ahead, pledging continued action on public safety, an ambitious housing plan, major investments in climate action, mental health care, child care, and more. But even as she outlined many planks in her policy agenda, further outlined in a 275-page booklet, there were several areas where she only provided a vague notion of something she plans to tackle and a number of prominent proposals she did not include – ideas that elected officials, advocacy groups, and think tanks are now pushing to be part of her coming executive budget for the next fiscal year or to be passed by the Legislature.

The governor’s State of the State set the stage for the policy, budget, and legislative battles ahead. It included many of the proposals that Governor Hochul and New York City Mayor Eric Adams jointly announced in December in the “Making New York Work for Everyone” action plan, which was developed by the ‘New’ New York panel of experts, planners, business and community leaders, and others. The plan, which received broad praise, detailed 40 different initiatives aimed at improving the future of New York City and its regional economy with measures to boost business districts, create jobs, transform public space, build housing, improve mass transit, and more.

The governor’s agenda will be fleshed out in more granular detail in legislative language and her executive budget proposal, which is not only a spending document but a vehicle for non-fiscal policy and legislation. In the weeks ahead, various stakeholders will advocate for their own priorities, some with competing interests and others that dovetail together. And those interests cover the gamut on everything from mental health policy to housing, transit, worker benefits, immigrant protections, criminal justice reforms, and climate policy, to name a few.

Here’s a look at some of the critiques of the governor’s 2023 State of the State agenda, prominent policies she did not include, or areas where she did not offer a concrete plan but pledged to take action in the future.

Republican Response
Former U.S. Rep. Lee Zeldin, a Long Island Republican who ran for governor against Hochul last year, issued the party’s response to her State of the State. “Hochul’s State of the State address was another small swing and a big miss,” he said in a video posted online.

He highlighted ten items on the Republican agenda for this year, most of which formed the core of his gubernatorial campaign platform and many of which are non-starters with Hochul, the Democratic Legislature, or both: term limits for statewide elected officials; a state of emergency over crime; rolling back a series of criminal justice reforms (including bail reforms, Raise the Age legislation, parole reforms in the Less is More Act, the HALT Act limited solitary confinement, and discovery law changes) and giving judges discretion to use a dangerousness standard when setting bail; lifting the state cap on charter schools; reversing the state ban on fracking and approving new gas pipeline applications; the “largest tax cut in the history of the state”; rehiring public sector employees who were fired for refusing to take the COVID vaccine; firing district attorneys “who refuse to enforce the law”; and refusing to meet with any campaign contributors soliciting business from the state.

State Senate Republicans, who remain in the minority versus a Democratic super-majority in the upper house of the State Legislature, also issued a “Rescue New York 2023” agenda this month that includes a long list of legislative priorities covering public safety, workforce development, education, mental health, infrastructure, taxes, business regulation, climate policy, and more.

Besides the proposals mentioned by Zeldin, it specifically calls for items including additional funding for law enforcement and harsher penalties for gun and drug offenses, increased funding for mental health programs and opioid overdose prevention, permanently capping state spending increases at 2% annually, and making more deposits in the Rainy Day Fund, $200 million in tax relief for working families by increasing the Earned Income Tax Credit, a $464 million tax cut for small businesses, and creating a Legislative Budget Office, to name a few.

NYCHA
The New York City Housing Authority’s fiscal woes were compounded by the pandemic. While it already has a $40 billion capital need because of decades of underinvestment, its operating finances have also been hobbled as more than 73,000 households owe about $454 million in back rent. In a budget presentation in December, NYCHA officials warned that without that revenue, it may not be able to make necessary repairs as required under a 2019 agreement with the U.S. Department of Housing and Urban Development (HUD).

Though some of that gap could be made up by the state’s pandemic-era Emergency Rental Assistance Program (ERAP), tenants at NYCHA remain at the low priority end of the list for payments. The program’s funding has dried up and applications will no longer be accepted after January 20.

Though Hochul mentioned NYCHA-related accomplishments from last year -- passage of the Preservation Trust program to raise funds for public housing repairs at many developments -- in her State of the State speech, she did not otherwise include any new proposals or make any mention of it in her accompanying State of the State policy book. Hochul and Mayor Adams did recently announce a plan to replace 335 elevators at 20 NYCHA developments, part of a $300 million funding agreement signed in April 2022 with the Dormitory Authority of the State of New York. 

Public housing was similarly absent from the recent $1.7 billion federal budget deal signed by President Joe Biden. NYCHA supporters hope that Hochul’s executive budget will include new funds for NYCHA repairs to the tune of at least several hundred million dollars in the next fiscal year.

Housing Legislation
While many housing advocates praised Hochul’s new “Housing Compact,” which commits to a sweeping plan to build more housing across the state, some expressed disappointment that she did not make mention two high-profile pieces of legislation to prevent evictions and ease access to housing for those living in homelessness or facing the threat of it.

Advocates are chiefly pressing for two bills: ‘good cause’ eviction and a new Housing Access Voucher Program.

Good cause eviction, sponsored by State Senator Julia Salazar and Assemblymember Pamela Hunter, is among the top priorities for progressives and advocates and has been gaining momentum in Albany. The bill would give tenants greater protections against both evictions and large annual rent increases. Landlords have been ardently opposed to the bill, while Hochul has only said it is something she is looking at without offering a position. The absence of any semblance of the bill in her agenda signaled to many that she does not support it.

The housing voucher program, proposed by State Senator Brian Kavanagh and former Assemblymember Steven Cymbrowitz, would allocate about $200 million in its first year for vouchers to help homeless families and those facing homelessness. It’s also high on the agenda for many legislators and advocates but Hochul has not supported it. Last year she expressed concerns about the cost of the program, disputing the Legislature’s estimates, but legislators pushed back saying that the cost of the program would be capped each year.

Cea Weaver, campaign coordinator for the Housing Justice for All coalition, issued a scathing critique of what she called a “gutless” housing plan. “Instead of investment in public housing, we got handouts for big developers. Instead of vouchers to help more New Yorkers afford homes, we got zoning changes. Instead of real tenant protections like Good Cause, we got more wishing and hoping that the private market will solve everything,” she said in a statement responding to Hochul’s State of the State. The coalition has proposed a five-point plan which, besides good cause eviction and the voucher program, includes other proposals that they believe will create equitable housing in the state.

Meanwhile, the Community Housing Improvement Program (CHIP), which represents owners and managers of tens of thousands of rent-stabilized buildings in New York City, is making a concerted effort for a “vacancy reset” that would give landlords the ability to reset rents on tens of thousands of vacant rent-stabilized units. The ‘reset’ would keep the apartments in the rent-regulation system but allow increases to bring rents level with neighboring rents, which they say is necessary for landlords to be willing to invest in renovations of dilapidated apartments.

MTA Finances
Among the glaring omissions from the State of the State was a plan to fill a structural hole in the MTA’s budget. The MTA’s finances were thrown into deeper disarray by the pandemic and it has gotten by on $16 billion in federal aid that will be spent through the 2026 fiscal year.

The agency’s annual operating budget for 2022 was about $19.4 billion – $7.2 billion from taxes and subsidies, $6.9 billion from fares and tolls; and $2.9 billion in federal aid.

Ridership on subways buses and commuter rails has not yet reached the same levels seen before the pandemic, and may never or not for years as commuting and work patterns have changed, affecting crucial fare revenue. The agency also has a recurring structural deficit of about $2.5 billion annually.

In November, the MTA released its latest budget presentation, proposing a 5.5% hike in fares and tolls. That is up from the usual 4% raise that went into effect every two years but wasn’t implemented in 2021 because of the pandemic. But despite revenue from higher fares and tolls, operational savings and other measures, the agency still needs another $600 million. MTA leadership, particularly Chair and CEO Janno Lieber, has repeatedly called for state and city leaders to rethink how the MTA is funded in order to more fully include transit as a core service in the state budget.

In the State of the State, Hochul punted on any solutions to the MTA’s dire straits. “We all know that the MTA is the lifeblood of the New York City metro region, and we will continue to invest in and ensure its long-term fiscal health,” she said without offering any specifics. Those could be offered in her executive budget, or simply pushed into coming months of negotiations with the Legislature.

The lack of a plan has already invited critics. “If Governor Hochul is as committed to a ‘reliable’ and ‘affordable’ MTA as she says, she must reject a fare increase to $3,” said Assemblymember Zohran Mamdani, a Queens Democrat and lead sponsor of the “Fix the MTA” legislative package that would raise revenue for the transit authority and increase service, in a statement. “And if she wants to continue characterizing the MTA as ‘world-class transportation’ – something that most New Yorkers would not agree with – she must fund greater frequency across the entire system, and make buses free.”

“The MTA is poised atop a financial precipice: it is our responsibility as State legislators to ensure it returns to sound financial health,” said State Senator Andrew Gounardes, a Brooklyn Democrat who is lead sponsor on two of the bills in the “Fix the MTA” package, in a statement. “This speech was a missed opportunity to adequately address its funding needs, and commit to a robust plan to ensure the MTA is able to fully realize its potential in the coming years. I was disappointed to not see more policy regarding our public transit, as well as disappointed to see that no mention was made of de-carbonization in the Governor’s plans for the MTA.”

Taxes
Citing predictions of a recession, Hochul said in her speech that she would not raise income taxes this year. She’s also previously expressed concern about out-migration from the state, which many blame on the state’s high tax rates though there is limited evidence of significant tax-related flight among the wealthy. The state last increased taxes on high-earners and corporations in 2021, to raise up to $4 billion in revenue, with those increases set to expire in 2027.

Hochul’s pledge not to further raise income taxes on the highest earners sparked a backlash from progressive legislators and groups that have long argued for additional tax increases on the wealthiest residents of the state to pay for social programs.

Eight democratic socialist legislators – State Senators Julia Salazar, Jabari Brisport, and Kristen Gonzalez, and Assemblymembers Zohran Mamdani, Phara Souffrant Forrest, Marcela Mitaynes, Emily Gallagher, and Sarahana Shrestha – spoke out after the speech in favor of higher taxes on the uber wealthy. “While Governor Hochul’s State of the State address commits to crucial investments for New Yorkers, it does not go nearly far enough,” they said in a joint statement. “Her remarks failed to acknowledge New York’s dire need for new revenue through increased taxes on the ultra-rich. Instead, she presented fiscal sleight-of-hand through unfunded half-measures and non-solutions.”

“Increasing revenue through fair taxes on the wealthiest New Yorkers is sound fiscal policy that will strengthen our economy and make New York a better place to live for working people,” said Nathan Gusdorf, executive director of the Fiscal Policy Institute, a nonprofit research group. Without new revenue, the state will be unable to make massive investments to achieve universal child care, high-quality public education, affordable housing and reliable public transit, all of which are on Hochul’s agenda. “Until the Governor supports new revenue, her plan to rebuild New York will not come to fruition,” he said. 

The Invest In our New York coalition has urged the governor to approve several new taxes to raise billions of dollars in new revenue and pay for education, universal child care, universal health care, affordable housing, climate action, mass transit infrastructure, and more. That includes a progressive income tax, an heirs tax, a capital gains tax, a billionaires tax, a restored corporate tax and a Wall Street tax. “Lawmakers must prioritize passing policies that guarantee extreme wealth is taxed and those dollars are reinvested in our neighborhoods, instead of protecting millionaires and billionaires benefiting from a rigged system,” said the Invest in Our New York campaign, in part, in a statement.

Republicans and some fiscal monitors have argued against higher taxes, insisting that they will drive wealthy New Yorkers, who make up the core of the state’s tax base, out of state.

“Fortunately, Governor Hochul highlighted the need to stem outmigration. She wisely committed to not raising the personal income tax this year,” said Andrew Rein, president of Citizens Budget Commission, a nonprofit fiscal watchdog, in a statement. “New York’s competitiveness will be well served by restraining spending to ensure that the 2021 personal income tax increase sunsets on schedule.”

“Before it’s too late, New York’s governor and Legislature should embrace fiscal policies grounded in the three Rs of restraint, responsibility, and reform,” wrote E.J. McMahon, founding senior fellow at The Empire Center for Public Policy, a conservative think tank, in a policy brief. “Spending should be reined in, taxes reduced, and economic competitiveness restored as a top priority.” McMahon called on the governor to phase out the 2021 tax increases beginning in the 2023 fiscal year.

More broadly, The Empire Center released a detailed policy guide, dubbed “The Next New York: Renewing and Reforming the Empire State,” which contained 11 expert research papers with 63 reform priorities for the state to consider. The guide covers the state budget, public safety, public education, Medicaid and health care, mental health, the energy sector, transportation and transit, housing, the public-sector workforce, voting access and election integrity, and government transparency.

“We launched this ambitious research project to chart a path forward for our state, combining fresh ideas with proven approaches that can work again,” said Tim Hoefer, Empire Center’s president and CEO, in a statement. “In the wake of the pandemic disruption, the time is overdue to embrace new approaches to growing policy challenges—and to dust off some proven approaches that can work again. It’s time to shape the Next New York.”

Build Public Renewables Act
Hochul announced a series of green energy initiatives and climate-related bills in her State of the State. But she did not speak of the Build Public Renewables Act, which would allow the New York Power Authority (NYPA) to own and build new renewable energy projects, among other provisions. 

The BPRA garnered significant support last year and was approved by the State Senate but did not get a vote in the Assembly. Instead, amid significant criticism Assembly Speaker Carl Heasite convened a hearing on the bill after the legislative session had ended to examine it further. Climate activists argue that the bill is essential in meeting the state’s emissions-reduction targets set by the Climate Leadership and Community Protection Act of 2019, which would require reducing economy-wide greenhouse gas emissions by 40% by 2030 and by 85% by 2050 from 1990 levels.

Charter School Cap
In the lone debate of the general election for governor, Hochul said publicly for the first time that she supports raising the state’s cap on charter schools in New York City. Currently, there are  460 charter schools allowed across the state – including a cap of 290 in New York City, which was met in 2020.

Most Democratic legislators and the teachers union have opposed raising the cap, while charter school advocates and charter-friendly elected officials say more charter schools are needed to meet an outsized demand for them in the city and offer alternatives to failing traditional public schools. But Hochul did not mention charters in her speech or the policy book, leading to criticism from charter school proponents.

Overdose Prevention
In her speech, Hochul proposed several measures to stem overdose deaths, which skyrocketed during the pandemic even after increasing for years prior. They included a new interagency task force dedicated to the issue, greater access to drug testing technology, and continuing investment in life saving initiatives. But she did not include any support for the first two Overdose Prevention Centers that opened in New York City in November 2021 (and claim to have prevented more than 670 overdoses that could have been fatal) or additional such centers across the city and state. The two existing centers are seeking more funds to run around the clock, 24/7, instead of their current more limited hours.

“The Governor’s answer to the worst overdose crisis in New York’s history is to increase penalties for fentanyl and drug-induced homicide laws that only advance the War on Drugs, rather than the fight to save lives,” said Jawanza Williams, director of organizing for VOCAL-NY, an advocacy group. “Most egregious of all: Hochul’s complete omission of the leadership and support she could provide to the nation’s first Overdose Prevention Centers by utilizing executive action and Opioid Settlement funding.”

Criminal Justice Reform
In her State of the State Hochul pledged to increase resources for alternatives to incarceration and reentry services for those leaving state prisons. She also announced greater investments in law enforcement and proposed changes to the state’s controversial bail law to allow judges to jail more people pre-trial.

Criminal justice advocates responded with concern about further rollbacks to the bail reforms first passed in 2019 as well as the governor’s planned investments in police and prosecutors.

Additionally, there are several bills on the agenda for reformers that Hochul did not mention. They include the Clean Slate Act, sponsored by State Senator Zellnor Myrie and Assemblymember Catalina Cruz, which would automatically seal a person’s conviction record once they become eligible; the Treatment Not Jail Act, sponsored by State Senator Jessica Ramos and Assemblymember Phara Souffrant Forrest, which would ensure that people with substance use disorders, mental health issues, and other disabilities are given treatment instead of being incarcerated; and the Fair & Timely Parole and Elder Parole bills, which would make the parole process easier and make it easier for older inmates to be paroled.

There is also a package of sentencing reform bills that advocates are expected to pursue this year.

The Legal Aid Society pointed out that the governor proposed increasing funds to hire hundreds of more prosecutors across the state without commensurately offering more resources to public defenders. “Funding one side of the justice system without equal or greater investment in public defense addresses at best half the problem and exacerbates the deeply rooted inequalities at the root of the criminal legal system,” Legal Aid Society said in a statement.

Advocates are also urging the governor to support the Stop Violence in the Sex Trades Act, which would decriminalize sex work, among other measures to protect sex workers.

Education advocates are also pushing for the Solutions Not Suspensions Act, which would put in place restorative approaches to replace punitive school discipline practices which disproportionately harm students of color and those with disabilities.

Health Agenda
Last year, the governor pledged $20 billion to bolster the state’s health care system including funding retention bonuses for health care workers, increasing the minimum wage for home care workers, cost-of-living adjustments for human services workers, investments in health infrastructure, and aid to struggling hospitals.

This year, she promised more improvements including a “Future of Health Care” Commission to examine the system and make improvements, more capital investments, expanded Medicaid coverage for preventative health services, improving the state Essential Plan, protections against medical debt, expanded access to primary care, prescription drug price transparency, expanded flexibility for health care providers, expedited approvals for health care infrastructure projects, modernizing health data reporting, and more. But much of that agenda is not spelled out in her policy book, instead promising details to come, including fixes from the to-be-named commission.

Among advocates’ criticism of the governor’s health care agenda is that it fails to adequately address the state’s home care worker shortage, which is the worst in the entire country. Hochul allocated about $7.7 over four years to increase the home care worker minimum wage by $3 an hour.

“As New York’s population ages and home care workers continue to leave the sector, we are clear that a significant pay increase — 150% of minimum wage — is the only solution to stem the shortage,” said Ilana Berger, co-director of New York Caring Majority, an advocacy coalition, in a statement. “If she is truly committed to making New York the most age-friendly state in the nation and lifting up a workforce made up of women and people of color, the Governor must change course and invest in the home care system so that workers can receive the fair wages they deserve in the upcoming budget.”

Bill Hammond, senior fellow for health policy at the Empire Center for Public Policy, recommended several reforms to the state’s health care system that Hochul should undertake, chiefly reigning in Medicaid costs. The Medicaid budget is expected to be about $93 billion in 2023, a 76% increase over 10 years. The state’s share of that is about $33 billion, up 57% in that same period.

“The program’s broadening scope has magnified the effects of its pre-existing structural flaws,” Hammond wrote in a policy brief. “Its practice of paying substandard fees now compromises access and care quality for millions more of the state’s residents. Its vulnerability to inept management, fraud and political manipulation puts billions more of the public’s money at risk.”

Hammond urged the governor to implement a series of reforms, including tightening income-screening procedures for Medicaid recipients, among various other measures; making commercial coverage more affordable, including by eliminating taxes on health insurance under the Health Care Reform Act; establishing an independent pandemic review commission, rather than the outside consultant that the state has hired to assess its response to the COVID-19 pandemic; and rolling back or eliminating the state’s “certificate of need” law, which regulates the creation of health facilities, which he said is far too restrictive.

Immigrant Protections
Immigrant rights groups were left disappointed by the governor’s State of the State, which only proposed funding for an immigrant retraining program but not other benefits or protections specifically for the state’s immigrant population.

Advocates have been pushing for a $500 million Unemployment Bridge Program, modeled after the Excluded Workers Fund that the state created during the pandemic to provide relief to workers, mostly undocumented immigrants, who were ineligible for federal aid.

The program would provide workers with $1,200 a month if they lose their jobs, on par with the state’s unemployment insurance program that they are ineligible for. According to the Immigration Research Initiative, it could benefit up to 750,000 eligible workers, including 180,000 self-employed and freelance workers.

“The Governor’s speech fell far short of what’s needed for immigrants, communities of color, and working families across the state,” said Theo Oshiro, co-executive director of Make the Road New York, an immigrant advocacy group, in a statement. “While paying lip service to tackling the very real affordability crisis that New Yorkers face, the Governor again failed to mention and support crucial measures for which our communities have been clamoring.”

Oshiro also urged the governor to expand access to health coverage for immigrants, through her proposal to improve the state’s Essential Plan coverage and by approving the Coverage for All bill that would provide state-funded health coverage for New Yorkers, including the undocumented, that make up to 200% of the federal poverty line.

Advocates also called on the governor to support the Access to Representation Act, which would provide the right to legal representation to immigrants in immigration court at a cost of $100 million.

“While we are grateful for Governor Hochul’s commitments to some key programs, they are far from enough to ensure that all immigrant New Yorkers, including the over 30,000 newly arrived asylum seekers, have the support they need to integrate and thrive in New York State,” said Murad Awawdeh, executive director of New York Immigration Coalition,” in a statement. He also pushed for the New York for All Act, which would prohibit local and state law enforcement from working with Immigration and Customs Enforcement (ICE) and Customs and Border Patrol (CBP).

Penn Station Area Redevelopment
Though the State of the State included funding for various infrastructure projects, one that was conspicuously absent was the redevelopment of the Penn Station area in Midtown Manhattan.

The project, originally proposed in one form by former Governor Andrew Cuomo then adjusted somewhat under Hochul, would build about 10 towers around the transit hub, creating 18 million square feet of new building space with offices, housing, and retail space. The entire project is expected to cost about $22 billion, $7 billion of which would come from the state, which will also provide about $1.2 billion in tax breaks to real estate developers. The state is hoping to receive federal funding to cover at least half of the $7 billion.

The governor is forging ahead with the controversial project despite opposition from local groups, multiple lawsuits, uncertainty about its emphasis on new office space amid the work-from-home revolution, and questions from fiscal watchdogs about its financing structure. Even the developer for the project, Steven Roth, chief executive of Vornado Realty Trust, has expressed concerns about new development in the current economic climate, though he insisted that the company is committed to the Penn Station project. “I must say that the headwinds in the current environment are not at all conducive to ground-up development,” Roth told investors in an earnings call, according to NY1.

Freelancer Protections
At the end of last year, Hochul vetoed State Senator Andrew Gounardes’ and Assemblymember Harry Bronson’s Freelance Isn’t Free Act, which would give freelancers the right to written contracts, timely payments, a redressal process for nonpayments and penalties for employers who violate those rights. The legislation was modeled after a successful law that took effect in New York City in 2017 and has helped freelancers recover millions in payments.

Hochul, however, said the state law would be an undue financial burden on the state Department of Labor when she vetoed it — among several bills with some fiscal impact that she vetoed arguing they needed to be passed in order to be factored into the state budget, and part of a much longer list of the bills Hochul vetoed last year, many of which are likely to be taken up again by the Legislature this year. Hochul did not include the Freelance Isn’t Free Act in her State of the State agenda and has not otherwise proposed any other protections for freelance workers.

Voting Rights
In 2021, voters defeated ballot referendums that would have amended the state constitution to allow for same-day voter registration and universal absentee voting. As is required for all constitutional amendments, the two proposals were passed in two consecutive legislative sessions before heading to the ballot. But lawmakers did not reintroduce the proposals last year and Hochul did not do so in her State of the State. In fact, her policy agenda does not contain any election and voting-related proposals.

Aid-in-Dying Measure
Advocates are optimistic that this year the Legislature will approve the Medical Aid in Dying Act, which would allow terminally ill patients to request and use medication to end their lives. The bill, which has received increasing support from lawmakers over the years, is sponsored by Assemblymember Amy Paulin, who is the newly appointed chair of the Assembly's health committee, and State Senator Brad Hoylman. 

Behind the push for the legislation is the national advocacy group Death with Dignity, which launched its 2023 advocacy campaign earlier this month across the country, including in New York. “We are confident that our decades of work fighting for the right of everyone to have options in the face of terminal illness will bear fruit,” said Dr. Peg Sandeen, CEO of Death with Dignity, in a statement. “This is an issue that is widely supported by Americans across the political spectrum. We believe that every American has the right to safe, effective healthcare—on their own terms and with a full range of options available to them, including the option of medical aid in dying.”

***
by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note - this article has been updated to include a section on the Medical Aid in Dying Act. 

Max Politics Podcast: A Pro-Housing Agenda for New York, with Annemarie Gray


A housing ground-breaking (photo: Kevin P. Coughlin/Governor's Office)


January 17, 2023 - Max Politics Podcast: A Pro-Housing Agenda for New York, with Annemarie Gray

Annemarie Gray, a planner and housing expert who is now Executive Director of pro-housing group Open New York, joined the show to discuss the group's 2023 housing agenda, the Governor's sweeping Housing Compact proposals, what Mayor Adams should do next on housing, 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: A Pro-Housing Agenda for New York, with Annemarie Gray

Legal Marijuana Sales Have Begun in New York; What to Know About the Launch of the New Industry


NYS Office of Cannabis Management ED Chris Alexander, right (photo: @nys_cannabis)


Nearly two years after passage of the Marihuana Legalization and Taxation Act (MRTA), which legalized the once heavily-criminalized drug, the first legal retail sale of marijuana in New York occurred on Thursday, December 29.

"The first legal adult-use cannabis sales mark a historic milestone in New York's cannabis industry," Governor Hochul said in a celebratory press release that day. "Today is only the beginning, and I look forward to continuing our efforts to solidify New York as a national model for the safe, equitable and inclusive industry we are now building."

The dispensary that conducted the first legal sale of cannabis is located in Manhattan’s East Village and is operated by Housing Works, a non-profit supporting formerly incarcerated New Yorkers and one of the first 36 entities awarded an initial license by the state’s Office of Cannabis Management (OCM).

A long line of New Yorkers showed up to make a purchase as elected and appointed government officials celebrated the official legal launch of the new industry. OCM Executive Director Christopher Alexander, a key figure in standing up the legal marijuana industry in New York, made the first official purchase, followed by many others, including local City Council Member Carlina Rivera.

"We set a course just nine months ago to start New York's adult-use cannabis market off on the right foot by prioritizing equity, and now, we're fulfilling that goal," Hochul said in a December 21 press release announcing the impending first sale. "The industry will continue to grow from here, creating inclusive opportunities in every corner of New York State with revenues directed to our schools and revitalizing communities."

Lead legislative sponsors on the MRTA — State Senator Liz Krueger of Manhattan and Assembly Majority Leader Crystal Peoples-Stokes of Buffalo, both Democrats — also celebrated this historic milestone in New York’s cannabis history. 

"I am gratified to see the start of the adult retail cannabis sales, and that Housing Works has opened the first retail store,” said Krueger, who has been working to legalize marijuana for many years, in a December 29 statement. “Their decades of work with marginalized communities make them a perfect partner in the effort to ensure that New York's Cannabis market provides meaningful opportunities to those most impacted by the failed cannabis criminalization policies of the past.”

Peoples-Stokes, who has been particularly focused on racial equity and reparations for past over-criminalization in the legalization process, said, “I am so pleased to see the first legal sales of cannabis in New York occur today by a non-profit that's been dedicated to helping improve people's lives for decades.”

Mayor Eric Adams also applauded the first legal sale of cannabis in New York.

“Today marks a major milestone in our efforts to create the most equitable cannabis industry in the nation,” the Democratic mayor said in a statement. “The opening of the first legal dispensary in our state right here in New York City is more than just a promising step for this budding industry — it represents a new chapter for those most harmed by the failed policies of the past. The legal cannabis market has the potential to be a major boon to New York’s economic recovery — creating new jobs, building wealth in historically underserved communities, and increasing state and local tax revenue.”

The initial sales are the next major step in a process launched by the March 31, 2021 signing of the MRTA into law, which came after decades of advocacy. New York became the 15th state in the nation to legalize recreational use of marijuana for adults, setting up a complicated system of rules around growing, selling, possessing, smoking and otherwise using, and more. The law also included key provisions around racial justice and attempts to make amends for past racially-biased criminalization of marijuana that targeted Black and Latino communities.

There have been a number of bumps in the road to get to this point, and challenges remain — legal marijuana sales were expected to be more ubiquitous by this time, illegal retail sales have popped up all over New York City with limited law enforcement response, and many localities around the state have opted out of allowing legal retail sales at all.

The Office of Cannabis Management (OCM), created in the MRTA under the new Cannabis Control Board, was tasked with “but is not limited to production, licensing, packaging, marketing and the sale of cannabis,” per the OCM website. Additionally, OCM and the Cannabis Control Board took over New York’s previously existing medical marijuana program. 

As 2022 ended, New York State had over 200 cannabis farms that had cultivated $750 million worth of marijuana (nearly 300,000 pounds) just waiting to be sold in retail dispensaries, according to a Bloomberg report

In late November, OCM approved the first 36 Conditional Adult-Use Retail Dispensary (CAURD) licenses for the retail sale of cannabis in various forms, with many more licenses to come in 2023 and beyond.

In New York City, the Adams administration has launched Cannabis NYC within the Department of Small Business Services to help launch, boost, and regulate the industry.

As the name suggests, the Marihuana Legalization and Taxation Act was also focused on revenue for the state, and expectations are in the hundreds of millions of dollars per year of cannabis-generated tax revenue for the state and localities combined.  

As retail sales begin — delivery is also launching — timelines have been muddled and there are outstanding questions regarding licenses, enforcement, and more. Here’s what to know as this new legal industry gets going in New York:

Administration of the MRTA
In March 2021, the New York State Legislature passed and then-Governor Andrew Cuomo signed the MRTA into law. 

That immediately set in motion the process of establishing the state’s Cannabis Control Board and Office of Cannabis Management, though there were delays in getting them up and running, and then farming and sales. Amid all of the decision-making was the major focus in the law on racial equity and attempts to address past wrongs of the punitive War on Drugs by “ensuring the greatest possible participation by communities historically impacted by prohibition,” as stated on the OCM website. That includes requiring CAURD license applicants to have some ties to a past marijuana-related arrest. 

“You, or your parent, spouse, or child must have a conviction for a marijuana-related offense to be eligible for a CAURD license,” according to the CAURD application information page on the OCM’s website, though nonprofits working with the formerly incarcerated, like Housing Works, were also eligible for a small number of initial licenses.

The MRTA legalizes recreational adult use of cannabis in various forms (smoking, gummies, etc.), the cultivation of the needed plants, and commercial sale of marijuana in licensed small businesses as well as delivery. Along with generating tax revenue for the state and its localities from a new commodity in the economy, the law also seeks to decriminalize marijuana, help individuals and communities impacted by the criminalization of marijuana, and shrink the illegal drug market while providing safe, tested legal products.

But there have been many challenges in the overall effort to launch a new state agency and industry, crafting the details of the legalization process, issuing licenses, the overall societal adjustment, how localities have reacted, and more.

One of the bigger challenges we've faced this past year in moving the MRTA into action is not only starting from scratch to launch a regulatory structure from the MRTA for cannabis but simultaneously building an entirely new State agency as well,” said Aaron Ghitelman, a spokesperson for OCM, in a late December email in response to a Gotham Gazette inquiry with a series of questions.

“In the last 12 months, the Office of Cannabis Management has grown from 30 employees to around 150, and we expect to be fully staffed when we reach about 300 employees,” Ghitelman continued. “That means OCM staffers are wearing multiple hats, working nights, attending weekend events, and traveling across the State, educating New Yorkers about cannabis legalization and licensing opportunities. We're excited for next year because as our team grows, so does our capacity. OCM will be able to increase these efforts in 2023 and beyond.”

According to a spokesperson for the New York City Department of Small Business Services, home to the new Cannabis NYC office, “The biggest obstacle is the required mindset shift regarding cannabis, from government to business to community. This is a new legal industry, but we must overcome entrenched stigmas from past prohibition. Meanwhile, New York also has the largest, previously existing “legacy” industry which includes both entrepreneurs, consumers and their communities, many of which have been damaged from disproportionate criminalization and disinvestment.”

The spokesperson reiterated that this is why the MRTA was written to help previously convicted individuals with low-level marjuana charges on their records.

“There is a major gap in cannabis education, community resources, and government regulations available to support that immediate transition,” the spokesperson said by email. “Cannabis NYC, in collaboration with many NYC agencies, has been working rapidly to build a programmatic framework to support education and resource allocation for all New Yorkers interested in participating in the legal cannabis industry.”

Municipalities (cities, towns, and villages) in New York had the option to opt-out of retail marijuana dispensaries up until Dec. 21, 2021. Via local votes, a total of 759 out of 1,520 municipalities opted out of allowing dispensaries in their localities, according to an online tracker by the Rockefeller Institute of Government. That includes most of Long Island opting out of retail sales.

Asked for OCM’s reaction to the large number of opt-outs among localities, Ghitelman said the hope is that they will see the positives of implementation and eventually opt in.

Unlike other states that provided the option and a large majority opted out, New York will have widely accessible sales,” he wrote. “90% of cities in New York State will have cannabis sales, including New York City, Albany, and Buffalo, meaning an overwhelming majority of New York residents will have access to local dispensaries. As our consumer-oriented industry comes to life, the availability of safe, tested cannabis products will reduce harms currently threatening public safety allowing local economies to grow equitably; we believe localities will opt back in.”

On public education efforts, he said: “We're launching our next public health campaign that focuses on educating New Yorkers about all things legal for cannabis and hope those efforts will clear up confusion some New Yorkers may still have around legalization and help them understand their rights around the use of cannabis products throughout the State.”

Adult Use and ‘Personal Cultivation’
Upon being signed into law, the MRTA immediately allowed adults 21 years and older to partake in the recreational use of marijuana in places where smoking tobacco is allowed, which includes city sidewalks and designated smoking areas, but excludes restaurants, parks, and schools.

When moving about in the state, people 21 and older “may possess up to 3 ounces of cannabis and 24 grams of concentrated cannabis (like vaporization oil or an edible),” according to OCM’s Penal Law fact sheet about the MRTA. It is illegal to resell any marijuana products that an individual purchases legally.

The MRTA also permits adults to “have three mature and three [immature] cannabis plants within their private residence, with a limit of six mature and six immature plants per private residence,” according to the New York State Association of Counties’ April 2021 MRTA summary.

Adults are allowed to have up to five pounds of marijuana in their private home. In public, adults can carry up to three ounces of marijuana and up to 24 grams of concentrated cannabis, according to the New York State Courts website.

Retail Sales
Although the MRTA was signed into law on March 31, 2021, the first retail dispensary in New York did not open for 20 months after signing. Eventually, officials barely made their deadline of opening the first retail dispensary by the end of 2022, with only two days to spare, and with far fewer dispensaries in operation by that time than previously planned.

After some delay, OCM announced on November 21, 2022 the issuance of the first 36 Conditional Adult-Use Retail Dispensary (CAURD) licenses, with more to come in 2023. Governor Hochul subsequently announced that retail sales would begin at the one Manhattan location on December 29.

“Not only have we ended the prohibition in New York, but we're showing the nation, and the world, how to build a market that's truly equitable and inclusive, and works to undo the harms caused by the disproportionate enforcement of cannabis prohibition,” said OCM Executive Director Chris Alexander in a December 21 press release. “Every dollar spent in this growing industry will help support independent businesses, our schools, and our communities."

The 36 initial CAURDs approved by the Cannabis Control Board and issued by OCM include “28 licenses for business owners with a cannabis conviction or a family member with a cannabis conviction, [and] 8 approved for nonprofit organizations,” according to an OCM press release on November 21. “At least one CAURD license was granted in each available region of the state,” the release said. Licenses were allocated in regions that have allowed retail sales and are not currently embroiled in legal battles preventing cannabis licensing. There is ongoing litigation  preventing such licenses in, for example, the Bronx, Queens, and Long Island. 

The application windows for CAURD licenses closed in September of last year, and OCM received “over 900 applications” in the first application round.  

“I’m thrilled that we’ve approved the first adult-use retail licenses as part of the Seeding Opportunity Initiative, which sets our industry off on the right foot- with equity, justice, and sustainability at the forefront,” said Jen Metzger, Cannabis Control Board Member, in the November press release. “These entrepreneurs will be selling sun-grown cannabis cultivated with a minimal carbon footprint, and we must continue to ensure that New York’s industry remains on an equitable and climate-conscious path well into the future.” 

One unique aspect of the CAURD license is its qualifying business criteria, including: “at least thirty percent (30%) of the applicant must be owned by an individual who is/has: Justice involved, Qualifying business experience, Sole control of the applicant, and [a] Significant presence in New York State,” per OCM.

Justice-involved means someone who “was convicted of a marihuana - related offense in New York State before March 31, 2021.” The marijuana-related offenses that the MRTA aims to expunge or correct are lower-level offenses, such as possession of smaller amounts of marijuana or the criminal sale of smaller amounts of marijuana. Other offenses such as “possession of up to 16 ounces of marijuana, sale of up to 25 grams of marijuana,” etc. can also be expunged, but only within a two-year time frame starting from when the MRTA was passed. 

These licensing requirements were part of the MRTA’s goal of righting past wrongs related to the criminalization of marijuana, particularly for low-level offenses in communities of color. The law also expanded eligibility for record expungements regarding certain marijuana charges.

The announcement of the first adult-use retail dispensary licenses was a historic moment for New York, establishing an equity-centered backbone of the legal market’s seed-to-sale supply chain in just over a year from the appointment of the OCM’s Executive Director, Chris Alexander,” said the spokesperson for the New York City Department of Small Business Services (SBS), which houses the city’s new Cannabis NYC program.

Mayor Adams, who has repeatedly championed the legalization of marijuana, appointed Dasheeda Dawson, also known as TheWeedHead, as the founding director of Cannabis NYC when he launched it in August 2022.

“Leading Cannabis NYC is an incredible full circle moment,” Dawson said in a statement accompanying the mayor’s announcement of her hiring. “Growing up in East New York, I survived the height of cannabis prohibition and witnessed targeted enforcement derail the lives of my friends and family. I was stopped, searched, and treated like a criminal before I ever touched the plant, which shaped my initial perceptions.” 

“Now, as a cannabis patient, educator, and regulator, I get to support other consumers, small businesses, and local stakeholders in the growing industry so that cannabis — once used to suppress communities like mine — can be tapped as a tool for transformation,” Dawson continued. “I’m thrilled to be back home, helping to craft an equity-centered approach to the city’s cannabis industry framework that welcomes all New Yorkers to the table.”

Dawson has “hit the ground running,” according to the SBS spokesperson. “Since taking the reins she has focused on creating a plan forclosing the gap in cannabis competency and understanding, from policy to health equity, for City agencies, media, and community-at-large. One of her main goals is to avoid the pitfalls other jurisdictions have fallen into while dispelling myths and stereotypes. She has also worked to advance Mayor Adams’ equity-centered agenda in the public representing the administration at several key cannabis industry events in this city.”

“Since launch, we have worked closely with the State’s Office of Cannabis Management (OCM) to support the initial Conditional Adult-Use Retail Dispensary (CAURD) license application,” the spokesperson continued. “During the 30-day CAURD application window, Cannabis NYC engaged with over 1,000 New Yorkers across the suite of services made available through SBS, including a hotline, webinars and providing direct services to applicants through our Business Solution Centers.”

CAURDs are just one of several marijuana licenses the Control Board and OCM are establishing.

Although we are very excited about the nearly 300 conditional licenses that have been State-approved across cultivation, processing, and retail, we understand that there are 9 license types within the MRTA that will represent most of the licensed cannabis business in the New York market,” said the spokesperson from NYC SBS. “To that end, on 11/21/22 OCM also released their proposed adult-use regulations which covered 7 of the 9 license types included in the MRTA.”

The MRTA outlines nine marijuana licenses: Cultivator License, Processor License, Cooperative License, Distributor License, Retail Dispensary License, Microbusiness License, Delivery License, Nursery License, and On-site Consumption License. 

The SBS spokesperson continued, “Now the real work begins! There will be a 60-day public comment period followed by amendments to the regulations. Cannabis NYC will be hosting a regulatory policy review workshop series for external stakeholders to discuss the regulations, aggregate feedback and submit comments to the State in coalition. Whether you are interested in entrepreneurship, economic development or enforcement, we want to be an advocate on behalf of the City’s needs as the State continues to develop an equitable, inclusive and safe industry.”

Taxation of and Revenue from Legal Cannabis in New York  
“New York State expects to receive $20 million in revenue from licensing fees,” within the first year of legalization, according to the New York State Counties Association MRTA summary. When legal retail dispensaries start to generate sales, “the State projects $360 million in annual state revenue and $75 million for local governments” to proceed via what is expected to be a multi-billion-dollar industry. 

Per the Counties Association summary, details of some of the sales taxes include: “cannabis flower is taxed at a rate of $0.005 per milligram, cannabis concentrate is taxed at $0.008 per milligram, and edible cannabis products are taxed at $0.03 per milligram. There is also a 9% tax on retail sales that goes to the State and an additional 4% tax that goes to the localities where the dispensary is located.”

The tax revenue will go to numerous state drug treatment programs as well as disproportionately affected communities: 20% of tax revenue will go to drug treatment programs and the public education fund; 40% will be allocated to the community grants reinvestment fund which will be used for job placements, adult education, mental health treatment, etc., according to OCM’s website

In the ongoing process of implementing the MRTA, over the last several months, the Cannabis Control Board has also approved new “home-grow regulations for medical patients and designated caregivers,” the OCM “previewed new adult-use cannabis regulations,” and the New York Social Equity Cannabis Investment Fund announced that it has selected firms to oversee the design and construction of New York’s first retail cannabis dispensaries. 

“This is just the very beginning stages of implementation, and we are not likely to see applications open for the MRTA licenses until April 2023,” said the spokesperson from the city’s Small Business Services and Cannabis NYC. “In the meantime, we must continue working diligently to build the infrastructure to support this anticipated multibillion-dollar industry.”

Illegal Sales, MRTA Obstacles
Essential to the state and localities achieving tax revenue goals and the success of the new legal cannabis industry in New York will be some significant degree of elimination of illegal marijuana sales.

A recent boom of smoke shops illegally selling marijuana after legalization, and the lack of enforcement to close them down or ensure they stop selling marijuana itself, has created significant headaches and obstacles.

“More recently, we are seeing a proliferation of new players exploiting the intentions of New York’s landmark bill, opening unlicensed smoke shops, and putting public health and equity at risk,” said the spokesperson for the city’s Department of Small Business Services and its Cannabis NYC. 

Of illegal sales, Ghitelman from OCM said, “The illicit market directly undercuts the hard work of entrepreneurs reinvesting in their communities. Across New York, OCM works alongside law enforcement to remove illicit cannabis trucks, shut down illegal stores, seize these untested products, and coordinate efforts to protect the legal market. New York's legal, regulated cannabis market will continue to thrive as we remain committed to ceasing operations in the illicit market and working toward closing unsanctioned stores across the State.”   

Amid major uproar and just ahead of the launch of legal marijuana sales, Mayor Adams announced in mid-December “the results of a two-week interagency pilot conducting enforcement against unlicensed establishments selling cannabis, cannabis-infused edibles, illegal vaping products, illegal cigarettes, and other illegal tobacco products. The pilot program…resulted in the seizure of more than $4 million worth of products being sold illegally and the issuance of 566 civil and criminal summonses.”

At the same time, we will continue our efforts to educate unlicensed operators about the law and hold bad actors accountable,” Mayor Adams said at the time.

Meanwhile, on Wednesday January 18, the New York City Council is set to hold an oversight hearing on “the proliferation of unlicensed smoke shops in New York City.” The hearing will be held jointly by three Council committees on health, consumer protection, and oversight and investigations.

Legislation to fight illegal cannabis sales has also been drafted by State Assembly Member Amy Paulin. Her bill, announced in December, would make any business selling cannabis without a license subject to a penalty of at least $2,500 for the first violation, $5,000 for a second, and potential seizure of the business on a third. The current fine for a business is just $250, according to Paulin’s office.

The bill would also “add language to New York State penal law to clarify that unlicensed cannabis retailers are subject to current laws relating to the unlawful sale of cannabis. Current ambiguity in the law has in some instances impeded police crackdowns on illegal sales at shops, which has allowed them to continue illicitly selling,” the Assembly Member’s press release states.

“Individuals applying for the appropriate licensure and complying with the law are at an immense disadvantage when other individuals are evading licensing fees, product regulations, and rules set out by the OCM,” Paulin said in announcing the legislation. “To ensure the legitimacy of the adult-use cannabis industry, we must penalize bad actors in the same manner as we do for other legitimate industries in our state who operate without a required license.”



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