Gov. Hochul at a bill-signing (photo: Mike Groll/Governor's Office)

Update: Governor Hochul signed legislation to restore some of the comptroller's oversight of SUNY, CUNY, and Office of General Services centralized contracts on December 30, 2022.

Governor Kathy Hochul has yet to sign a bill that would restore some of the Comptroller's contract oversight powers that had been stripped by her predecessor, Andrew Cuomo, putting her at odds with the state's chief fiscal watchdog, members of the State Legislature, and good government advocates.

The wait-and-see on the bill, which passed both houses of the Legislature in June, is "frustrating" some of the main stakeholders, including Comptroller Thomas DiNapoli, who has pushed for the restoration on and off over the decade.

Hochul has said she is still considering legislation that would give the Comptroller power to review some major state contracts from the State University of New York (SUNY), the City University of New York (CUNY), and the Office of General Services before they are signed  – often referred to as “pre-audit” authority. Comptroller Thomas DiNapoli and good-government groups say the measure would codify protections intended to limit opportunities for corruption, waste, and fraud.

DiNapoli has gone the bulk of his tenure without that authority after Cuomo and the Legislature stripped it from him in 2011 and 2012. Its absence featured prominently in corruption scandals that dogged Cuomo throughout his time in office and led to the convictions of several of his close allies and donors.

The bill would restore pre-audit authority over Office of General Services centralized contracts; certain contracts from SUNY, including SUNY health care facilities and the SUNY Construction Fund; and CUNY contracts, including its Construction Fund.

According to the comptroller's public database, Open Book, the state has committed tens of billions of dollars outside DiNapoli's pre-audit authority in OGS contracts alone. That means the Comptroller's Office didn't have the chance to flag potential issues with the bidding process or contractors ahead of their issuance, unlike with many thousands of other annual contracts entered into by state entities.

Hochul has until the end of the year to sign or veto the bill.

"Frustration would be a fair characterization. The bill passed overwhelmingly in both houses," DiNapoli told Gotham Gazette in a phone interview last week.

"With the change in administration there needs to be a new level of transparency. A bill like this should really be a no-brainer," he said. "I think it should have been signed months ago."

Asked about the legislation at an unrelated press conference on November 29, Hochul said the bill was still under review along with hundreds of other pieces of passed legislation.

"We are always looking to strive to improve accountability and transparency in state government. We can always do more," she said, noting the year-end deadline still a month away. "But it's important that people know that we take taxpayer dollars very seriously, that they are invested and allocated based on strong principles and not access to individuals as has happened in the past."

"It's an opportunity to show our priorities and how I'm going to lead over the next four years," she added.

A spokesperson for Hochul referred Gotham Gazette to her November 29 statement after an inquiry about the status of the bill.

Advocates say the measure would help prevent the kinds of pay-to-play schemes that plagued the Cuomo administration, including the bid-rigging plot in the $1 billion “Buffalo Billion” economic development program that landed a top aide and other allies in prison. Part of that involved SUNY Research Foundation and its nonprofit affiliates, leaders of which manipulated a request for proposals to steer tens of millions of dollars in contracts to corrupt bidders who were major donors to Cuomo's campaigns.

“Prior to being removed by Governor Cuomo, the Comptroller’s oversight powers over many of these state contracts existed for over 100 years," wrote Tom Speaker, a policy analyst at the good-government group Reinvent Albany, in an email. "Every day that Governor Hochul delays signing this bill is another day that her office continues a Cuomo-era policy that puts hundreds of millions of taxpayer dollars at risk.”

Reinvent Albany and 34 other advocacy groups, labor unions, and political organizations urged Hochul to sign the legislation in a memo in support of the bill in October, before the general election she went on to win.

"Comptroller oversight is crucial for ensuring the integrity of state contracts," the memo states. "The Comptroller’s office reports that it reviewed $235 billion in state contracts in 2020, and identified multiple cases where oversight saved the state millions. Allowing large contracts to go unchecked risks the abuse of billions of taxpayer dollars."

The Comptroller's Office could not say the exact value of contracts that would have been under pre-audit oversight, had it not been removed.

"Because the COVID emergency orders eliminated our approval role and the need for a competitive procurement, we cannot provide an accurate or complete number of contracts that we did not have an opportunity to review," wrote spokesperson Mark Johnson in an email.

"Especially in the early Cuomo years there were these huge centralized contracts, as I said in the billions, that went through OGS that we didn't review," DiNapoli said in the interview. According to Open Book, the largest was a $4.1 billion contract with Citibank from 2014 for credit and travel cards to be used by state agencies, school districts, and other entities.

In 2019, as Cuomo faced pressure over the scandals, he and DiNapoli signed a memorandum restoring some of those powers to the comptroller's office under an agreement that could be terminated with ten days notice. The legislation before Hochul would codify much of that agreement and go beyond it, with higher thresholds that will place more contracts under the comptroller's pre-audit jurisdiction. It would also expand the length of time the comptroller has to conduct pre-audit reviews from 30 days to 90 days. Advocates for greater checks and balances say the bill substantially brings the comptroller's authority back to the pre-2011 status quo.

The bill sponsors, Assemblymember Kenneth Zebrowsky and Senator Elijah Reichlin-Melnick, told Gotham Gazette discussions with the administration went cold ahead of the election, in which Hochul faced a competitive challenge from Republican Lee Zeldin.

At the time, Hochul indicated that she had issues with some of the value thresholds that would place a contract under the comptroller's pre-audit oversight. Under the current memorandum, the comptroller may review proposed SUNY and CUNY contracts valued at $250,000 or greater and OGS centralized contracts of $85,000 or greater. The legislation keeps the OGS threshold the same but gives the comptroller the power to review preliminary SUNY and CUNY contracts as low as $50,000 in some cases.

"I'm in conversations with the comptroller as we speak about the levels," Hochul said, when asked about the bill on the debate stage with Zeldin in October. "We think we can negotiate a position to recognize that inflation is out there. So something that may be worth $50,000 10 or 12 years ago has a different price point.”

"We are actually having conversations to make sure that people do feel comfortable that we restore the oversight system," she said. "And I believe in this, I mean, I believe in accountability and transparency and that's how I continue to conduct myself as the governor of the state of New York for the next four years."

Hochul, Cuomo's lieutenant governor, came into office in August 2021 promising "a new era of transparency," collaboration, and ethical government.

"I'm waiting," Reichlin-Melnick told Gotham Gazette of the governor acting on the bill. "There were conversations between their team, me, the Senate staff, the Assembly, the Comptroller, with a couple of proposals back and forth and then everything kind of stopped leading up to the election…I have not heard back from the governor's office in the last three weeks since the election."

"How would I characterize it? To-be-determined," Zebrowsky said in an interview, of the status of negotiations.

Neither lawmaker gave specific details about the proposals during negotiations before they fizzled out. "The main source of contention is that the administration felt like the bill that passed constrained them too much, it put too many barriers in place towards rapid issuance of contracts," said Reichlin-Melnick.

One of the main voices against the legislation is SUNY, which sent a memorandum of opposition to lawmakers in May – after it passed the Senate and before it passed the Assembly – raising concerns about the lower thresholds and longer review window.

"It will result in costly delays for hundreds, if not thousands of SUNY contracts, and further hinder SUNY’s ability to compete for students, faculty, and research," stated the memo, issued by the SUNY Office of Government Affairs. "Increased purchasing costs due to delays will also impact the healthcare and patient services provided by SUNY’s three hospitals to vulnerable populations across the state."

According to a 2019 State Comptroller's Office report, pre-audit reviews take on average between six and seven days and only take longer when the contract raises red flags.

"I think it's kind of a bogus argument, because that's just not the reality of how long it takes," DiNapoli told Gotham Gazette, echoing comments he repeatedly made when Cuomo stripped the powers and then sought to defend the move. "But the purpose of the 90 days as existed before is to give maximum time if in fact there is a need for closer scrutiny."

He said a shorter window could have unintended consequences. "If we're under a tighter timeframe, it may compel us to just reject the contract because we don't have adequate time to get through it,” DiNapoli warned. “So I don't think it achieves what they think it might be achieving."

"But," he added, "nobody's advanced anything to my knowledge along those lines. They've just been using that as a reason to say they're against the legislation. SUNY has a history of wanting to operate as an entity unto itself and I don't think that's right."

DiNapoli, Reichlin-Melnick, and Zebrowsky each said they were open to discussing changing some of the parameters of the bill to address administration concerns as long as the comptroller's pre-audit authority was materially restored.

"My line in the sand is to make sure that there's no loopholes in the language that allows the governor to waive the review," Zebrowsky said. "In terms of the threshold levels, we think these are appropriate. If the governor attempts to come up with different levels I would ask for a justification and I would confer with the comptroller."

"Any attempt to carve SUNY out in any significant way would be a nonstarter to me," DiNapoli said.

Gov. Hochul at a housing event (photo: Kevin P. Coughlin/Governor's Office)

New York faces an acute housing crisis: rents are sky high, not enough housing is being built, homeownership is increasingly out of reach, and there is a looming eviction crisis coming out of the covid pandemic. But while the issues contributing to the problem have long been simmering, solutions from state and city leaders have been halting and piecemeal, far from meeting the need wherein 53% of New York City tenants are rent-burdened, with 32% “severely” rent-burdened.

The housing crisis, including the shortage of new housing to meet demand, requires an all-of-government response. New York City Mayor Adams and the City Council have recently passed or announced plans for tens of thousands of new apartments, with the mayor promising more to come. Heading into the new year, all eyes will be on Governor Kathy Hochul and the State Legislature as the state’s budget and legislative session begins, with housing among the top issues on the agenda for the newly-elected governor and legislators.

The Democratic governor has already promised that housing will be one of the top priorities for her administration as she starts her first full term in January.

“People want to live here; they just can’t afford it anymore,” she said in an October interview with Politico New York. “The cost of housing is up 57 percent in the last seven years. Rent is up, depending on the part of the state, anywhere from 27 percent to 57 percent across New York. And so what that does is it creates a barrier for young people who are raised here, educated here and want to live in the same neighborhood they grew up in — Long Island, Westchester, the city — and they can’t afford it. That’s a tragedy.”

She pledged to release a “very ambitious housing plan” to meet what she has said is the state’s need for between 500,000 to 1.2 million new units of housing over the next ten years. (The National Low Income Housing Coalition estimates that New York has a shortage of more than 615,000 rental units for very low-income households with a maximum income of $26,200 for a family of four.)

Hochul has already committed to a five-year, $25 billion housing preservation and construction program that will produce 100,000 units, just scratching the surface. “So we have to be much more creative and start catching up with other cities and regions in building housing,” said Hochul, who earlier this year proposed but was unable to pass a series of policies to boost housing production in the state.

In the keynote speech at the New York Housing Conference’s annual conference on Thursday, Hochul pointed to the scope of the state’s housing woes. “We are in the midst of a housing crisis that has been decades in the making,” she said. “In the decade before the pandemic we created jobs at three times the rate of housing units leaving us with 1.25 million jobs but only 400,000 units of housing. See the disconnect? We now have the jobs but where are you going to put the workers? Where are they supposed to live?” 

Hochul also acknowledged that the crisis is largely self-inflicted because of the “cumbersome” regulations that delay development for years, as well as local anti-housing opposition. “We're a national leader in blocking housing…New York is essentially in a league of its own when it comes to constricting housing development,” she said.

The governor again pledged Thursday to offer a “bold and audacious” housing plan in her January State of the State agenda, which she said will include a real statewide “housing strategy,” which is currently lacking.

Navigating the state’s housing crisis will be a monumental challenge and there will be at times competing and complementary policy pushes from the governor, lawmakers, tenant and housing advocates, the real estate industry, local officials like Mayor Adams, and others. Reforms could address the entire spectrum of housing policy from rent regulations and tenant protections to zoning rules and tax incentives, and beyond.

“The most important thing is that housing is at the top of the agenda in Albany for 2023,” said Andrew Fine, policy director for Open New York, a pro-housing group based in the city. “And that there’s an agreement among the governor and the State Legislature that they can't go home in June without passing some meaningful bills that will advance housing production.”

In New York City, where the affordable housing crisis is particularly severe, Mayor Adams is attempting to make sweeping changes to citywide zoning regulations under his “City of Yes” plan, in order to make it easier to build housing. As the specifics of that proposal are being crafted with a 2024 timeline, the Adams administration has been working on a series of major development deals, often with private developers, and the City Council has approved over 12,000 units of new housing on rezoned land already this year.

But Adams’ administration has its own demands of the state, particularly when it comes to tax incentives that the governor, mayor, and others say are crucial to spur real estate developers to build affordable housing.   

“New York City urgently needs more rental housing, including a significant number of below market rate units,” said James Whelan, president of the Real Estate Board of New York, in a statement. “The State Legislature has taken several actions in recent years purportedly in response to the housing crisis – and that crisis has only gotten worse. We hope the Legislature will now take a different approach by focusing on common-sense policies that produce more of the rental housing New Yorkers desperately need."

Meanwhile, some housing advocates are particularly focused on legislation that will immediately protect renters from large rent increases, eviction, and homelessness. The Housing Justice for All statewide coalition, for instance, has backed three proposals – Just Cause Eviction, a new Housing Access Voucher Program, and the Tenant Opportunity to Purchase Act.

Among other policies, there is renewed focus heading into the 2023 state session on those three bills as well as how to bring tens of thousands of vacant rent-stabilized units back into tenancy, crafting a replacement for the expired 421-a tax abatement program for housing development, the white whale of sweeping property tax reform, ways to build more housing in the New York City suburbs, and more.

Tax Incentives
Perhaps the most important tax benefit for the real estate industry was 421-a, a program that incentivized affordable housing creation and lapsed last year. Progressives long criticized the program as effectively a major giveaway to developers with limited return on investment.

Governor Hochul proposed a modified version, called 485-w, that had stronger affordable housing mandates and would have opened up new kinds of housing to the tax benefit. But her proposal failed to pass in the face of opposition from state legislators. The governor is likely to advance another measure next year and it remains to be seen whether it will get a nod from the Legislature. Mayor Adams and administration officials are among those who have called for a new solution to be crafted to ensure more housing production.

At a Citizens Budget Commission breakfast last month, Jessica Katz, the city’s chief housing officer, said that besides incentives for new construction, the Adams administration is also pushing for a tax abatement for housing preservation “because now we're in a position where because of the economic environment, we're starting to worry about housing quality in a way that we haven't had to in a certain amount of time.” She specifically referred to renewing the expired J-51 program for renovating residential buildings. 

Zoning and Regulatory Reforms
The CBC and the Regional Plan Association, a nonprofit think tank, have both urged changes to the state’s zoning laws and regulations that determine housing development and land use decisions statewide. 

In a report released in September, CBC recommended that the state make changes to the State Environmental Quality Review (SEQR) process to expedite development and to set objective standards for local governments to contribute to regional housing while expedite approvals for projects that meet those goals. 

RPA has called for a more sweeping zoning framework for the state. “The discussion is heading to how can we change our overall regulations so that we can build more, and more of the type of housing that we need, but in a way that is going to be less objectionable for communities than what's being built now or what could be built otherwise, whether those concerns are noise, height, or gentrification and having too many luxury apartments with not enough affordable,” said Moses Gates, RPA's Vice President for Housing and Neighborhood Planning, in a September appearance on Gotham Gazette’s Max Politics podcast.

“At the top of the list is we just need a state framework at all…In New York, we have absolutely nothing,” he added in the interview, pointing to states like New Jersey and California that have made progress. “We don't even have a state department of planning. So before we can do anything...the state just needs to acknowledge that it plays a role in housing production, smart planning, and housing growth.” 

Hochul indicated in her speech Thursday that her approach will be statewide, alluding to the type of framework that Gates spoke of. “[E]very community, every small town, every local zoning board, every planning board, every community has a role to play. And they must,” Hochul said.  

Basement Apartments and Accessory Dwelling Units
The Adams administration is also pushing for the legalization of basement apartments and other Accessory Dwelling Units, which officials say will open up new units of housing while also giving homeowners additional streams of income. It would also help bring under code existing illegal housing that can be especially dangerous.

Hochul had proposed a bill in last year’s budget to legalize ADUs for single-family homes, which would have allowed homeowners to go around local zoning laws to add basement apartments or certain types of ‘granny flats.’ But she scrapped it after facing significant backlash from suburban lawmakers, both Republicans and Democrats, particularly on Long Island.

Transit-Oriented Development 
Another proposal Hochul could revive in the new year is a measure to allow multi-family housing development around rail transit stations in New York City and its suburbs. Hochul proposed the idea in this year’s budget but it was met with similar opposition as the ADU proposal and she eventually scrapped it too.   

The proposal has support from advocacy groups that say it is crucial to building more housing, especially near transit and in the suburbs.

“We don't think that New York is keeping pace with other states that have really taken actions to unlock housing supply by using the state zoning authority,” said Rachel Fee, executive director of the New York Housing Conference, a nonprofit advocacy group. 

Good Cause Eviction
One of the chief priorities for progressive lawmakers and tenant advocates is the “good cause eviction” bill proposed by State Senator Julia Salazar and Assemblymember Pamela Hunter, which would give tenants stronger protections against significant rent raises and evictions. Landlords have vociferously opposed the proposal as it gained momentum in Albany, while Governor Hochul has so far refused to take a position on it. 

Housing Vouchers 
State Senator Brian Kavanagh and outgoing Assemblymember Steven Cymbrowitz, who chair the housing committees in their respective chambers, proposed legislation to create a Housing Access Voucher Program for homeless families and households at a risk of homeless, which would cost roughly $200 million in its first year. The measure had significant backing in the Legislature but the governor’s office did not support the bill, specifically arguing over the estimated budget impact of the program.

It is likely to be among the top housing priorities for the Democratic majorities in the Legislature during state budget negotiations.

Tenant Opportunity to Purchase
State Senator Zellnor Myrie and Assemblymember Marcela Mitaynes sponsored the Tenant Opportunity to Purchase Act, which would give tenants first chance to buy the buildings where they live before the owner can put them on the open market. The proposal, also known as right of first refusal, did not make it past committee last year.

Rent-Stabilized Vacancies
The Community Housing Improvement Program (CHIP), a group that represents owners and managers of tens of thousands of rent-stabilized buildings in New York City, is making a major push for a “vacancy reset” allowing landlords to reset the rent on rent-stabilized units when they are vacated to a level in line with other apartments in the neighborhood, higher than is currently allowed under state law.

The group says the measure would allow building owners to rehabilitate 20,000 vacant and dilapidated units, which would then continue being regulated but at the new, higher rent. According to reporting from City Limits, as many as 38,621 rent-stabilized units out of roughly 1 million in the city, are vacant, down from more than 61,000 last year, per data from New York State Homes and Community Renewal, the state’s housing agency, which relies on self-reporting by landlords. According to CHIP, owners have been unable to perform needed renovations on many of those buildings after the Legislature passed the Housing Stability and Tenant Protection Act of 2019 (HSTPA), which limited rent increases on vacated rent-stabilized apartments. 

“Better housing is possible. And it doesn’t require billions of dollars in government investment, it simply requires the government to implement policies designed to grow the supply of housing and rollback current policies, which are designed to keep housing scarce,” said Jay Martin, executive director of CHIP, in a statement. “The high rents, lack of quality apartments, and overall frustration with housing is solely due to bad policies put in place decades ago, and the lack of political courage among elected officials to change these policies over the years.”

Tenant advocacy groups have naturally opposed the idea of a so-called vacancy reset. And the proposal will likely face headwinds from left-leaning legislators. But there will be pressure on Hochul and lawmakers to find a solution that will help bring tens of thousands of vacant, rent-stabilized units back into service to tenants.  

Open New York, for instance, has proposed an action plan to reduce apartment vacancy including a statewide rental registry, greater enforcement through foreclosures on properties with longstanding unpaid taxes and violations, property tax reform, adding more affordable homes to the city’s online Housing Connect portal, and beefing up staff at the city’s Department of Housing Preservation & Development.

Besides the vacancy reset, CHIP’s legislative agenda for 2023 also includes support for Hochul’s ADU and transit-oriented development proposals, the Housing Access Voucher Program, removing the cap on floor area ratio that limits the size of housing development, and a ban on parking minimums for housing development near transit hubs.  

CHIP and the Rent Stabilization Association, another trade group of landlords and property owners, filed a lawsuit prompted by the 2019 law, arguing that the entire rent regulation system is unconstitutional. The case has yet to be decided and could end up on appeal before the U.S. Supreme Court.  

Increasing the FAR Cap
Last year, Governor Hochul proposed eliminating the state’s cap on floor area ratio (FAR) for residential buildings in New York City, which would allow developers to build denser buildings. Commercial buildings already have a higher FAR cap than residential ones. But the proposal was among several housing policies that failed to pass the finish line and which the governor may revisit next year.  

Property Tax Reform
A big open question is whether the governor and Legislature will finally attempt to reform New York City’s property tax system, which is in large part governed by state law and imposes inequitable taxes on homeowners despite the value of their homes. Successive mayors have pledged to take it up as an issue in Albany and have repeatedly failed.

The most recent effort came from Mayor Bill de Blasio who punted the issue to a commission that issued its reform recommendations in a report just days before his tenure ended. Mayor Adams has shown no indication of carrying that report forward or proposed any alternatives of his own. 

The New York City Council held a hearing in mid-November on the city’s property tax system, where there was a variety of testimony urging city and state officials to urgently address the issue in 2023. Among those testifying was City Comptroller Brad Lander, who issued a framework for comprehensive reforms including incentivize new rental housing production by reducing base tax rates by about 30%, aligning tie tax breaks with the cost and affordability of buildings, and replacing the expired 421-a program with a new version of the state’s Mitchell-Lama program to create permanently affordable, cooperative homeownership.

Assemblymember Ron Kim (photo: @rontkim)

November 30, 2022 - Max Politics Podcast: Ron Kim on How Democrats Can Win Back Asian Voters

Queens Assemblymember Ron Kim, fresh off a narrow reelection win, joined the show to discuss how Democrats can win back Asian voters who have been moving toward Republicans in recent election cycles, what's wrong with the Democratic Party in New York, 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.

A rally for Iwen Chu, center (photo: @Iwen4NY)

This month, Iwen Chu became the first Asian-American woman elected to the New York State Senate, clinching an unexpectedly tight victory over Republican Vito LaBella. Starting in January, Chu will represent the 17th Senate District, a newly-created Asian-plurality district in Southern Brooklyn, redrawn in the recent redistricting process based on demographic trends in the 2020 Census, which saw Asian Americans as the fastest growing group in New York in the last ten years.

Chu’s victory was hard fought, with a margin of just 215 votes as of November 21, and though going into the election she was expected to win fairly easily, she wound up defying the political headwinds by significantly outperforming the top of the Democratic ticket in neighborhoods that have been increasingly leaning towards Republicans over the last few years.

The new 17th District, one of 63 Senate seats across the state, includes parts of Sunset Park, Bensonhurst, Bath Beach, Bay Ridge, Kensington, and Dyker Heights, with a population that is 48.6% Asian, 29.3% white, and 18% Hispanic according to the CUNY Graduate Center’s Redistricting and You project.

The district is home to 69,884 registered Democrats, 18,645 Republicans, and 40,182 party-unaffiliated registered voters, according to State Board of Elections data as of November 1. Even though Democrat Joe Biden won what is now the district by nearly 17 points over Republican President Donald Trump in the high turnout 2020 election, the district has been growing redder in other races, like for mayor and city and state legislative seats.

As was readily apparent from this and past elections, portions of Southern Brooklyn are unlike much of the rest of the heavily Democratic borough. In the 2021 mayoral race, Republican nominee Curtis Sliwa carried much of the region over Eric Adams, and in this election, Republicans won three Assembly seats, unseating incumbent Democrats.

In this year’s election, not only did Hochul win by a far narrower margin than the Democratic gubernatorial nominee in the last four elections, but Democrats sustained significant defeats in Southern Brooklyn, on Long Island, and in the Hudson Valley. And though U.S. Rep. Lee Zeldin, the Republican nominee for governor, lost in all of Brooklyn to Governor Kathy Hochul by a margin of 28.3% to 70.8%, he handily won in Southern Brooklyn.

The new 17th State Senate districts overlaps significantly with the smaller Assembly districts 47, 49, and 51, and slivers of Assembly Districts 44, 45, 46, and 64.

Assembly Districts 47 and 49 cover the vast majority of Senate District 17 and include the neighborhoods of Bensonhurst, with its large Asian-American population, Bath Beach, New Utrecht, and parts of Bay Ridge and Dyker Heights. Zeldin bested Hochul with 62% and 63% of the vote in those two Assembly districts, respectively. LaBella won those Assembly districts with smaller margins, 55% and 52% of the vote, respectively, meaning Chu was able to outrun Hochul by 7 and 11 points. However, in Assembly District 51, which covers Sunset Park and Red Hook, home to large Asian and Hispanic communities, Hochul won with 76.4% of the vote. Parts of that district in Sunset Park fall within the new Senate district and Chu won there with 71% of the vote, in essence providing her narrow overall margin of victory.

Asian voters in Southern Brooklyn and parts of Queens have been voting more Republican in recent election cycles, and Chu had to win over many of them that were voting for Zeldin for governor in order to win her Senate race.

Chu did have her advantages over LaBella, a former NYPD officer and education activist. She has long been involved in the local political arena, as a member of Community Board 11, a member of Community Education Council District 20, and most recently as former chief of staff to longtime Assemblymember Peter Abbate (who was among the Democratic incumbents defeated this year). Chu ran unopposed in the primary for the new open seat and was able to quickly garner widespread support from the Democratic political establishment, progressive groups, elected officials, political clubs, and labor unions across Brooklyn and beyond into the general election.

Chu’s policy platform was comparable in parts to her opponent’s. “I believe education and public safety is not a party position. That's why even my opponent and I, on these two issues, we are very similar,” she said in a Monday interview. Chu supported changes to the state’s controversial bail laws to give judges more discretion in setting bail though LaBella’s positions went further – he was pushing for entirely reversing the state’s bail reforms, which eliminated cash bail for most nonviolent offenses.

Both Chu and LaBella opposed efforts to replace gifted and talented programs in city schools and to drastically change admissions at the city's elite Specialized High Schools, issues that are particularly important to Asian American communities and on which Democrats have found themselves split.

Chu also advocated for increased social services to tackle the root causes of crime, greater support for small businesses, including loans, grants, and language assistance programs,  increased resources for immigrant communities including legal assistance and poll site interpretation services, investments in street safety improvements, and increased affordable housing support.

LaBella, meanwhile, also said he would push the governor to audit and fire any district attorneys who refuse to enforce the law, echoing a call from Republicans aimed specifically at Manhattan District Attorney Alvin Bragg, a reform-minded Democrat. LaBella also railed against Critical Race Theory, though it isn’t taught in city schools. In September, he landed in hot water after the New York Daily News reported on a video he posted last year from his summer home in Massachusetts, in which he said, “I just like it so much better here than Brooklyn. I hate fucking Brooklyn, I wish I never had to go back.”

Though Chu, as a longtime participant in local politics and an Asian-American woman, had a ready constituency clamoring for representation in state government, she knew the challenge she faced, having taken stock of the 2021 mayoral election. “We cannot afford to leave any stone unturned!,” she tweeted ahead of the election along with images of two maps showing how Sliwa performed well in the 2021 election alongside the contours of the new Senate district. She called for help from Democrats to ensure the seat would be theirs.

“I knew the vote would be close, but I didn't think that close,” Chu said in the Monday interview.

The issues that resonated with voters in the new 17th State Senate District were similar to those that Sliwa pounced on to win broad parts of the area: concerns about public safety, including rising anti-Asian hate crimes, and education, specifically preserving gifted and talented programs and test-based admissions to the city’s specialized high schools.

“Safety concerns, it's definitely the number one topic no matter what language you speak or what background you're from. Everybody wants to feel safe,” Chu said.

Some Democrats have long recognized that Southern Brooklyn voters go their own way and the Democrats there tend not to vote strictly along party lines. “We’ve never had blowout elections in Southern Brooklyn,” said State Senator Andrew Gounardes, a Democrat whose current, outgoing district covered many of the neighborhoods of the new 17th. Gounardes himself flipped a seat from Republican to Democrat in the ‘blue wave’ 2018 elections.

Gounardes placed no small amount of blame for losses and close calls on the state and county Democratic parties, which took a hands-off approach to the election that has incensed Democrats across the borough, city, state, and even country.

“This election cycle, I didn't see a single bit of effort from the state party to invest in Southern Brooklyn. I didn't see any effort…barely an effort from the county party to help in southern Brooklyn,” he said of the Brooklyn Democratic Party, which has been accused of failing to support its candidates while blaming them for their own defeats.

Gounardes worries that without constant effort and attention from the party apparatus, “we will lose these neighborhoods for good. And I’m very concerned about that. because we have worked so hard to move the needle so far. And to see this work now being undone because we can't get the parties to pay attention is very disappointing.”

“In the most Democratic county in the country, we should not be losing Democratic incumbents when the top of our ticket is winning,” he added.

City Council Member Justin Brannan, a Bay Ridge Democrat who also narrowly won reelection last year, echoed Gounardes. “Southern Brooklyn has always been unique and complicated and often misunderstood or taken for granted,” he said. “Every cycle people seem to have amnesia about how close the general elections are in Southern Brooklyn and I certainly don’t enjoy saying, ‘I told you so’ but this is something that we've been sounding the alarm on for quite a while. The Democratic Party has all but completely lost large portions of voters in Southern Brooklyn who are now reliably voting Republican.”

What most people agree on is that Democrats lost the rhetorical battle to Republicans on the issue of crime and public safety. Republicans repeatedly hammered away at rising crime rates, blaming Democratic policies for what they depicted as an out of control city and state, especially honing in on rising hate crimes against the Asian community. That message was largely consistent from local races up to the statewide level.

“Campaign strategy-wise, Republicans, they do organize, they do,” Chu said. “Obviously, the voters took the message and then they sent the message to us loud and clear. Mainstream [Democrats], we didn't address Southern Brooklyn voters strong enough.”

“There was a well-funded Republican campaign that highlighted crime that certainly drove Republican votes in Southern Brooklyn,” said one Democratic consultant who wished to remain anonymous to speak more freely. “There was an effective messaging campaign by Republicans, whether it's fair or whether it's accurate is a different question…It's something that Democrats gotta figure out going forward to 2023 Council elections, 2024 legislative elections.”

Brannan conceded that his party did not offer a positive vision that could oppose Republican fearmongering that peeled away a significant chunk of voters, particularly amid the sustained pandemic era increases in most major crimes. “We're losing to an opposition who has zero solutions,” he said. “We're losing to an opposition who was just pointing at things and saying that's a problem. But our party is not countering that with anything. We're not articulating a vision to counter that ‘world is going to hell’ narrative.”

“The Democratic Party has to give more to the community than identity politics,” said George Sarantopoulos, who co-managed LaBella’s campaign with his wife, Heidi Chan-Sarantopoulos. “I think people are concerned in the district about crime. They're concerned about cost of living…They're worried about getting to work every day and going on the subway and getting robbed on the way coming back from work.”

Sarantopoulos said it was natural that Chu would have significant support from Asian New Yorkers, particularly as she pitched herself becoming the first Asian-American woman to be elected to the Senate. But Asian Americans also came out in support of LaBella, who is white, he said. “Obviously, our message resonated with a large portion of the Chinese community…I saw that in terms of voters, in terms of volunteers. Vito LaBella was embraced by a good portion of the community.”

One of the issues on which Democrats have lost ground to Republicans is specialized high schools and gifted and talented programs. Former Mayor Bill de Blasio sought to replace G&T programs with a universal enrichment model and change admissions policies at the specialized high schools to increase enrollment of Black and Hispanic students, earning the ire of many Asian Americans. That backlash was felt at the polls last year and has continued into this year’s election, even though many Democrats did not support de Blasio’s efforts. “I think the gifted and talented programs and specialized high schools are not up for negotiation...It’s a deal-breaker for the Chinese community,” Sarantopoulos said.

Chu said that the conversation around changing specialized high school admissions, which became a major focus for de Blasio in 2017, eroded “faith and trust about how the city government is serving us,” not just for Asian-American families but other immigrant communities in the district that see education as a crucial pathway for the next generation. “We need to prove to those voters…that not all Democrats are saying the same thing,” she said.

While Mayor Adams reversed de Blasio’s plan to replace G&T programs and even announced plans to expand on the current model, while also announcing opposition to changing specialized high school admissions and plans to open new specialized high schools, Republicans still successfully painted Democrats as a threat to the educational opportunities that many Asian New Yorkers prioritize.

What was also clear from the election is that while the state and Brooklyn Democratic parties failed to step in, Governor Hochul ran an anemic campaign in Southern Brooklyn. “There were definitely a lot of voters in WeChat that supported just Republican candidates in general…very much unhappy with the current incumbent Democrat,” said Yiatin Chu, president of the Asian Wave Alliance, a group that endorsed both Republican and Democratic candidates in the election but favored the GOP. Yiatin Chu (no relation to Iwen Chu) is a close personal friend of LaBella and volunteered on his campaign.

Yiatin Chu and the Asian Wave Alliance focused heavily on the issues of public safety and education, and on Asian turnout for many Republicans in the 2022 elections, from Zeldin to LaBella, as well as victorious or nearly-victorious Assembly candidates in Brooklyn and Queens.

In Southern Brooklyn, Republican Lester Chang defeated longtime incumbent Democratic Assemblymember Abbate in the 49th District (though there are questions about Chang’s residency that could endanger his victory); Democratic Assemblymember Steven Cymbrowitz lost to Republican challenger Michael Novakhov in the 45th District; and in District 46, incumbent Democratic Assemblymember Mathylde Frontus lost to her Republican opponent, Alec Brook-Krasny. In Flushing, Queens Assemblymember Ron Kim, a Democrat, won his reelection by a margin of less than four points in a district that Zeldin narrowly carried against Hochul. And in Rockaway, Democrat Assemblymember Stacey Pheffer Amato trails in her race by 246 votes.

Even the newly minted state senator conceded that Democrats have failed to pay attention to issues that voters in the district have raised, particularly around public safety and changes to education systems. “We're the voice of the district. We represent the people. So I need to make sure my colleagues in the State Senate, in Albany, in government, they need to understand Southern Brooklyn here, we’ve been ignored far too long,” Iwen Chu said.

Yiatin Chu said that key to Iwen Chu’s victory was her securing votes from many reliably Democratic voters, particularly outside the Chinese community. “But in terms of the unaffiliated, kind of the everyday parents, small business owners. They were not excited about her,” Yiatin Chu said. “It's kind of like the excitement for the first Asian woman in the Senate all came from outside the communities that she was running in.”

The political battle for the new 17th State Senate District has just begun. Iwen Chu and Democrats now have two years till the next election to prove to constituents that the party has their best interests in mind and solutions to their woes.

“We understand how the pandemic affected a lot of small businesses, immigrant businesses, how the pandemic increased a lot of Asian hate crime so that anyone in Southern Brooklyn who is Asian American, either directly themselves or someone they know has had a bad experience,” said Jay Brown, vice president of Bay Ridge Democrats, which endorsed Chu’s campaign. “So our side has plans to tackle those issues, and Iwen does, but that’s a nuanced conversation sometimes, how to attack those problems in a positive way.”

“It's a lot easier to just kind of tout crime and instill fear. That's a quick and easy thing to do,” Brown said. “And it resonates with people because they feel it. So we knew that was a hurdle to overcome. And we've been seeing that the past few years that that's been, reverberating throughout the communities a bit.”

Hospital staff (photo: Michael Appleton/Mayoral Photography Office)

New York State has made little progress bringing 1,000 shuttered psychiatric beds back into service after they were closed during the covid pandemic, raising questions about a signature element of the mental health and public safety agendas of Governor Kathy Hochul and Mayor Eric Adams.

In the April budget, Hochul and the Legislature allocated $27.5 million in state funding, matched by federal dollars, to restore the roughly 1,050 psychiatric beds shifted at the height of the pandemic when hospitals scrambled to make room for the swell of COVID-19 patients. Since then, only about 200 psychiatric beds have come back into use, according to the state Office of Mental Health (OMH) – a number that has not moved since June. OMH did not provide a breakdown of where the 200 beds are located.

According to OMH, nearly half the 850 defunct psychiatric beds are in New York City, where 415 remained offline as of September. Another 435 of the beds are closed outside the city, including 94 on Long Island, 141 in the "Hudson River Region," 61 in Central New York, and 139 in the western part of the state. ​There are currently roughly 5,800 licensed psychiatric beds in 97 hospitals across the state, and 3,300 more in New York's state-run psychiatric hospitals.

The state expects New York City to add another 200 psychiatric beds "in the coming months," according to the Office of Mental Health. In response to Gotham Gazette inquiries, the governor's office did not comment on the apparent lack of progress since June.

The beds have been central to the street safety plans Hochul and Adams have touted since January, policies aimed at beefing up police and mental health services, particularly underground, amid a string of high profile attacks committed by people with reported psychosis. According to the two leaders, psychiatric beds are a complement to their efforts to flood the city's public spaces with police officers, and to a lesser extent social workers – offering a helpful destination for those in severe need, who have often wound up on the streets and subways or in jail.

Part of a larger formula backed by and enacted in partnership with Mayor Adams, the psychiatric beds were announced alongside increased police and outreach worker patrols. In the state budget deal of April Hochul also toughened the state's bail and discovery laws and expanded Kendra's Law – a statute that enables officials to obtain court-ordered outpatient mental health treatment.

When announcing the state budget agreement on April 9, Hochul said, "There's an obligation on our part to not just make those kinds of changes, but to balance the other side of the equation as well. Invest in resources for those who need it most. Invest in the mental health structure infrastructure to give people what they need."

"We are going to make sure that there are over 1,000 psychiatric beds available because there are people that need care, they need attention, they need to be on a path to recovery," Hochul continued. "And they can't get it as long as there's beds that are not available in a place that can be helpful to them."

The psychiatric beds had been part of Adams' broader state budget ask when he testified before the Legislature in February, just before releasing his own preliminary budget.

"It is urgent that we request the state’s immediate assistance in expanding the number of beds for those in critical need of mental health care, and funding for the medical and support staff they require," Adams told state lawmakers in February.

"Too many of our fellow New Yorkers are cycled through temporary care and released before they are ready, often due to the limited availability of long-term support and housing," he testified.

"That's crucial for us," Adams had said of restoring the psychiatric beds when he made his preliminary budget announcement in February, which included more funding for police officers and homeless-encampment clearing.

"We're ending the era of tents. We're ending the era of sleeping on our subway system, with all your belongings, that era has ended in the city," Adams said. "But at the same time, we want to have additional help and giving people the mental help that they need."

The $55 million total state and federal allocation would fund higher Medicaid reimbursement rates for psychiatric beds that would bring them to the same levels as general medical beds.

"Let's make up that differential," Hochul said at another subway safety announcement with Adams in October. "That's what our money from the state went towards. So there's not an incentive to have fewer psychiatric beds."

But the higher reimbursement rates require federal approval, which is still pending, according to James Plastiras, a spokesperson for the state’s Office of Mental Health. None of the state allocation has been spent as of early November, meaning 200 psychiatric beds were restored at the existing Medicaid rate. Plastiras told Gotham Gazette the higher Medicaid reimbursement rates will be retroactive to April 1 once they receive federal approval.  

“Under Governor Hochul’s leadership, we are fully committed to providing a comprehensive array of services for any New Yorker experiencing a mental health crisis — including the unhoused," Plastiras wrote in a statement to Gotham Gazette.

"We are embracing innovative approaches to help these individuals address their mental health issues in meaningful ways that will allow them to transition into stable housing in independent settings," he said, noting investments in community-based mental health services and a $12.5 million budget allocation to add 500 scatter-site supportive units, which include on-site services, to the state's housing portfolio.

As of October, the state had not issued a request for proposals to initiate the supportive housing development, which includes services to support formerly-homeless individuals. According to Plastiras, one would be issued by the end of the year.

The state was also slow to complete the rollout of Hochul's Safe Option Support outreach teams, part of her first subway safety announcement with Adams in January, and it is unclear whether they have been effective in helping homeless individuals into permanent housing (after this article was published Plastiras told Gotham Gazette the teams have enrolled 500 individuals in some kind of service). And despite amending Kendra's Law, the new language was not used as the basis of any court orders in its first four months in effect, raising questions about implementation across the state.

It is not a simple matter to open a psychiatric bed in a hospital. It requires unique configurations of space and staff. In the case of repurposing medical beds, there can be construction costs and capital needs to make them safe and appropriate for psychiatric patients.

"All of this stuff they built into these rooms to take care of the [COVID-19] medical emergency needs to be undone," said Alison Burke, the vice president of regulatory and professional affairs at the Greater New York Hospital Association, which represents 280 member hospitals, in an interview.

Hospitals are also contending with staffing shortages that have become drastic during the pandemic. The state budget allocated another $9 million to recruit psychiatrists and psychiatric nurse practitioners with loan forgiveness. After a series of Gotham Gazette inquiries for this story, the governor’s office put out a press release on Wednesday, November 23 announcing the opening of applications for the program.

"Community-based mental health care providers continue to be impacted by the nationwide shortage of healthcare workers, and the demand for psychiatrists and psychiatric nurse practitioners continues to grow,” said New York State Office of Mental Health Commissioner Dr. Ann Sullivan, in the press release. “The Community Mental Health Loan Repayment Program will help our partners meet this growing demand by helping to attract and retain these essential professionals." 

"We're confounded by the fact that we have workforce challenges," Burke of Greater New York Hospital Association told Gotham Gazette. 

The commitments to higher Medicaid rates and staffing retention were welcome to hospitals, even if they have been slow to materialize. "We're moving in the right direction. It's a very welcome and necessary investment," Burke said.

As pandemic era crime increases came to define the 2022 election, as they had 2021 races in New York, Hochul emphasized the mental health funding she secured in the state budget alongside changes to the state's bail and outpatient treatment laws. In October, she joined Adams, and the heads of OMH, the MTA, and the NYPD to announce another phase in their subway safety strategy that she dubbed, "Cops, Cameras, and Care."

The plan included dispatching 1,200 more police officers to subways, installing surveillance cameras in every subway car, and opening up 50 new psychiatric beds, dedicated to homeless individuals with severe mental illnesses. Even with ridership up, Hochul, Adams, and their appointees said the public perception of danger is high, driven by unstable passengers and fare-beaters who they claim have a propensity for more serious offenses.

"It's not just stats. We can give you stats all day. The question is how do New Yorkers feel? We must match the actual impacts with how New Yorkers feel on the streets and in the subway system," Adams said.

"That's why the omnipresence of police officers and the removal of those who are dealing with mental health issues is crucial to our second phase of this important plan," the mayor said.

Asked to respond to the halting restoration of psychiatric beds despite the state budget allocation and promise of 1,050 beds back into service, a spokesperson for Adams referred Gotham Gazette to the city's Department of Health and Mental Hygiene (DOHMH).

"All of us – federal, state, city and service providers – are working day and night to improve our system of care for people living with mental illness. We are introducing new and innovative strategies to ensure that we can overcome decades of underinvestment and neglect to meet the incredible needs of the moment," DOHMH spokesperson Patrick Gallahue said by email.

The 50 psychiatric beds are separate from the 1,000 accounted for in the state budget, funded with $10 million from the state's general fund, Crain's New York reported. The first of two new 25-bed "Transition to Home" units opened on November 1 at the Manhattan Psychiatric Center, according to OMH. The office also plans to seek contract bids for a $7.3 million residential step-down program that will offer short-term housing with services to help individuals transition to more independent living.

At the time of the announcement, Adams said the NYPD had removed 1,500 "emotionally disturbed persons" from the subway during the calendar year "to prevent some form of incident from taking place." It is unclear whether those individuals were charged with a crime or where they ended up; a series of city agencies did not respond to inquiries other than to refer Gotham Gazette to another city agency.

A pre-election Democratic rally (photo: @nydems)

November 17, 2022 - Max Politics Podcast: After a Disappointing Election, What's Next for New York Democrats

L. Joy Williams, a Democratic strategist, president of the Brooklyn NAACP, and host of Sunday Civics, joined the show to break down the 2022 election results and discuss what's next for the New York State Democratic Party and Brooklyn Democratic Party, Gov. Kathy Hochul, bridging divides among Democrats' progressive and establishment wings, 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.

City Council Minority Leader Joe Borelli (photo: John McCarten/NYC Council)

November 17, 2022 - Max Politics Podcast: Why Republicans Had Such a Good Election in New York

Republican Joe Borelli, City Council minority leader and a major booster of Lee Zeldin for Governor, joined the show to discuss the New York GOP's strong showing in the 2022 elections — how it happened, what it means, 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.

Then-Gov. Cuomo holds a health care meeting (photo: Philip Kamrass/Governor's Office)

New York State overpaid more than $194 million in Medicaid payments during the pandemic after state officials failed to move eligible recipients to a cheaper funding plan, according to the Office of State Comptroller Thomas DiNapoli.

An audit of Medicaid payments from March 2021 to March 2022 found the state Department of Health continued to pay higher premiums to care management organizations even after receiving federal authorization to move some Medicaid recipients to a different plan at a fraction of the cost.

“My latest audit of Medicaid uncovered yet another example of millions of dollars in wasteful spending," said DiNapoli, in a statement to Gotham Gazette about the audit being released Thursday. "This time, the state Department of Health’s failure to make sure recipients were enrolled in the correct health care coverage, resulted in over $194 million in over payments. My office continues to monitor the system, but critical changes are needed."

The audit report, which was sent to DOH Commissioner Dr. Mary Bassett on October 31 and reviewed by Gotham Gazette, urges the health department to review and recover the excessive payments and continue to move eligible recipients from coordinated care plans to cheaper fee-for-service coverage.

The recommendations are not binding. DOH has 180 days to respond to the comptroller, the governor, and legislative leaders with steps the department has taken to meet the recommendations or explain why it has not.

The department, in initial responses to DiNapoli's recommendations, which were included in his report, and in a statement to Gotham Gazette, has maintained its decision to leave eligible recipients in more expensive managed care plans was essential to avoid service interruptions.

The state's Medicaid program provides medical coverage for 7.8 million impoverished New Yorkers and individuals with special health needs. It is funded by a mix of federal, state, and local sources with Washington covering about 57% and DOH administering the program. In the last fiscal year, New York's Medicaid claims cost $74.6 billion.

The state's coverage calculus is embedded in layers of payment programs that the federal government flexed at the height of the pandemic to help ensure New Yorkers kept their insurance. The comptroller's report suggests DOH officials failed to take advantage of the additional flexibility during a period of economic instability and regime change in the department and the governor's mansion (Governor Andrew Cuomo, whose Medicaid Redesign initiative established the managed care model for Medicaid recipients in New York, resigned in August 2021).

In general, the state pays for Medicaid in one of two ways. Medicaid recipients may be enrolled in managed care, meaning the state pays a premium to an organization that coordinates care and reimburses providers for their services. Alternatively, the state may pay providers directly on a fee-for-service basis.

For Medicaid recipients who also become eligible for Medicare coverage because they reach the age of 65 or have certain disabilities, the arithmetic pushes some managed care premiums higher than the deductibles and coinsurance the state would pay under a fee-for-service plan.

Prior to the pandemic, DOH was disenrolling these so-called dual-eligible recipients from two managed care programs with higher premiums and moving them to lower-cost fee-for-service plans.

With the onset of the pandemic in March 2020, Congress passed the Families First Coronavirus Response Act, which increased federal assistance to state Medicaid programs that maintained managed care coverage for people enrolled in the program during the state of emergency. DOH paused disenrollments to receive the increase.

In November 2020, federal regulations changed again to allow states to cancel managed care coverage as long as they continued to cover essential services through programs like fee-for-service. But DOH did not restart managed care disenrollment and continued to pay higher prices than it had to.

During the comptroller's audit period, the state implemented yet another program that would lower managed care premiums for one subset of beneficiaries – dually-eligible Medicaid-Medicare enrollees who do not need long-term care – in order to make it more cost-effective than fee-for-service. The program, called "IB-DUAL," lowered the average monthly premium by more than $800 per recipient during the course of the audit.

In total, the Comptroller's Office identified $190.6 million in excessive payments for Medicaid recipients who continued to be enrolled despite being ineligible for the lower-premiums of IB-DUAL. The comptroller found another $3.5 million in over-payments for recipients who were eligible but not enrolled in the IB-DUAL program.

In one case identified in the report, the state over 13 months paid an additional $85,000 for a single patient who was ineligible to remain in managed care under IB-DUAL but was not moved to fee-for-service. In total, New York made 667,000 monthly premium payments for Medicaid recipients who should have been moved to a fee-for-service plan, the comptroller said.

According to responses from DOH to the Comptroller's Office included in the report, the department continued with managed care enrollment for ineligible clients "in an effort to maintain continuity of care and services for this vulnerable population" as it prepared to launch the IB-DUAL program. It was ​​also "part of a broader Department strategy to encourage enrollment of dual-eligible individuals into integrated care options," according to the DOH reply submitted by Acting Executive Deputy Commissioner Kristin Proud.

But the vast majority of overpayment was for individuals who were not eligible to participate in IB-DUAL because they failed to meet other program requirements. The comptroller's report called DOH's statement "misleading."

DOH still has not resumed disenrolling managed care recipients who are ineligible for IB-DUAL, according to the report.

“The Comptroller’s audit fails to recognize that all disenrollments were halted effective March 1, 2020, due to the COVID-19 Public Health Emergency, wrote DOH spokesperson Jeffrey Hammond in an email to Gotham Gazette.

"In Nov. 2020, CMS granted states the option to restart disenrollments as they found appropriate so as not to put any undue hardship on members," Hammond continued. "The Department made the decision to allow Medicare members to remain enrolled in their Medicaid Managed Care (MMC) plan through the duration of the [public health emergency] to avoid potential disruption in care on the part of Medicaid members.

"To reflect this decision, the managed care premiums have been reduced to reflect the lower average cost of duals to the Medicaid program as Medicare is the primary payer,” he added.

DOH would not say what further steps have been taken toward DiNapoli's recommendations, including moving remaining recipients who are not eligible for IB-DUAL from managed care to fee-for-service plans.  

The release of the comptroller’s Medicaid audit comes on the heels of another audit from DiNapoli showing the state paid $11 billion in fraudulent unemployment insurance claims in the first year of the covid state of emergency, in large part due to failures by the Cuomo administration to update its unemployment insurance systems despite repeated warnings that it was out of date going back many years.

Governor Cuomo and legislative leaders, 2013 (photo: Governor's Office)

Democrats in New York are stinging from a rough 2022 election showing in which they lost several congressional seats to Republicans, potentially costing the party control of the U.S. House of Representatives. As they assign blame, many have pointed to a tumultuous redistricting precipitated by a broken state process, state legislative leaders who overreached in trying to draw overly partisan lines, a Court of Appeals that ruled in favor of Republicans, and former Democratic Governor Andrew Cuomo, whose political machinations laid the foundations for that chaos to unfold.

In the end, New York’s 26 new congressional districts were drawn by a court-appointed “special master,” who crafted highly-competitive lines for this year’s elections and the coming decade until the next U.S. Census and redistricting process. While Democrats were able to exceed expectations in many places across the country, they under-performed in New York, leading some to call recriminations of the state’s redistricting process a distraction from the central point of campaign failures of Democrats and successes of Republicans in New York.

But Democrats here and nationally had been counting on favorable New York congressional lines to counteract Republican gerrymandering elsewhere. And in the wake of the party’s losses across a number of New York districts and likely in the final overall House tally, many fingers are being pointed at the state’s redistricting process. So what actually happened?

The 2020 Census and a 2012 Compromise
The state’s redistricting began in earnest with the 2020 Census, when an anemic state outreach operation hobbled by Cuomo meant that New York lost one congressional seat, falling just 89 residents short (The U.S. Census did find later, however, that New York was among eight states where the population may have been overcounted in the Census estimate.)

New York’s House representation would fall from 27 to 26 seats, mostly because of a loss of population upstate, and an even more drastic redrawing of the districts would be necessary. 

New York was also set to undertake a new, untested redistricting process that ultimately resulted in chaos.

In 2012, Governor Cuomo, Democrats who controlled the State Assembly, and Republicans who controlled the State Senate reached an agreement to ostensibly reform redistricting to make it bipartisan and “independent,” putting it in the hands of a ten-member Independent Redistricting Commission. The commission would be tasked with taking into account population trends and various federal and state requirements, and drawing new district maps for the U.S. House of Representatives, State Senate, and State Assembly.

If the State Legislature rejected two consecutive proposals from the commission, it would then take over the drawing of new lines itself, a backdrop that was criticized at the time of the deal. Still, some saw promise in the new layers of independence and transparency, as well as attached anti-gerrymandering language.

The compromise was passed by two consecutive classes of the Legislature and put before voters. In a 2014 ballot referendum, New Yorkers approved by a 57.7-42.3% margin the state constitution amendment to adopt the new process and related requirements.

But even if elements of the new system signified progress, many critics presciently said the commission was designed to fail. Composed of four members appointed by Democratic legislative leaders and four by Republican leaders, plus two independent members chosen by a majority of the other eight, it was apt to deadlock on its proposed new district lines instead of finding consensus. This was especially likely if there were new political incentives at play, like one party controlling both houses of the Legislature. And that is exactly what happened.

Through wins in the 2018 and 2020 state legislative elections, Democrats took supermajorities in both houses of the Legislature, meaning less incentive for compromise from representatives of either party — Democrats with an eye on letting the Legislature craft new state legislative and congressional district maps and Republicans with an eye toward getting the map-drawing process decided by the courts.

That newfound power in hand, Democrats sought to alter the redistricting process ahead of its first implementation. They sought to pass an amendment to the state constitution last year that would have allowed the IRC to appoint two co-executive directors by simple majority vote, frozen the number of state Senators at 63, require that State Assembly and Senate district lines be based on the total state population, count incarcerated people at their place of last residence, change the voting thresholds for approving redistricting maps, and, crucially, let the Legislature take over the process of adopting new maps if the IRC fails to vote on any plans by the set deadline.

But the referendum to do so, which they placed on the November 2021 ballot, was rejected by voters, with 54% voting against and 45% voting in favor. In the low turnout election highlighted by local races, conservatives mounted a major campaign to defeat that and other ballot referendums that would expand voting access, while Democrats did nothing to promote them and secure voter approval.

The Legislature then passed and Governor Hochul signed a law that would accomplish the same goals as the proposed ballot question by amending the 2012 Redistricting Reform Act. But in a court ruling on redistricting, Judge Partrick McAllister found the law “substantially altered the constitution,” a step that could only be taken through a constitutional amendment and not through legislation, striking it down.

The Independent Redistricting Commission Gets to Work, Chaos Ensues
Seven years and a political lifetime after the redistricting amendment was approved by voters, the Independent Redistricting Commission began its work in mid-2021.

After six months of meetings and public hearings, the commission broke into two factions along partisan lines, and each proposed separate plans in January of this year, voting 5-5 in both cases. The plans then headed to the State Legislature, where any successful proposal would have required a two-thirds vote in both chambers to pass. Both proposals failed. 

The onus returned to the commission to create new maps, but the commission again deadlocked and, crucially, did so without passing any map proposals at all. After that, the Legislature took over the process of redrawing district lines. As was later decided in court, that did not follow the prescribed constitutional process, but the Legislature did not compel the commission to pass something for it to consider.

The Legislative Task Force on Demographic Research and Reapportionment (LATFOR), ready for the possibility, quickly drew new maps. Under the maps adopted by the Democrat-dominated Legislature and signed into law by Democratic Governor Kathy Hochul on February 3, the party would have held an advantage in 22 out of New York’s 26 congressional districts, allowing them to potentially grow their conference by three seats.

The new New York map would have the potential to counteract Republican gerrymandering elsewhere in the country in the national fight for control of the House. But the design also made the map ripe for a legal challenge, especially given the anti-gerrymandering language in the state constitution thanks to the 2014 amendment, which explicitly stated that “districts shall not be drawn to discourage competition or for the purpose of favoring or disfavoring incumbents or other particular candidates or political parties.”

The new maps were quickly challenged in court, with Republican opponents arguing in a lawsuit filed strategically in Republican-heavy Steuben County in March that the Legislature did not have the authority to draw new maps for the Legislature or Congress because the commission had never passed a second map to be disapproved in the first place, and also that the congressional map was an unconstitutional partisan gerrymander.

Steuben County Supreme Court Justice Patrick McAllister ruled in favor of the Republican lawsuit on April 1 and struck down the Democrat-created maps. 

McAllister even said in his ruling that the Independent Redistricting Commission could have been legally compelled to issue a second set of maps.

“There is nothing in the constitution that permits the IRC to just throw up their collective hands…Here the IRC stopped working well before its deadline,” he wrote in his order. “What someone should have done was bring an action to compel the members of the IRC to continue their work or for the political sides of the legislatures that appointed 8 of the 10 members of the IRC to remove and replace any IRC member that did not embrace his/her constitutional role.” 

The judge also gave the Legislature an opportunity to submit revised maps that would not require unanimous support but “must enjoy a reasonable amount of bipartisan support to insure the constitutional process is protected.” Democrats chose not to avail themselves of that opportunity, however, banking on their appeal to a more Democrat-friendly court.

Democrats appealed the decision but the state’s highest court, the New York State Court of Appeals, ruled against them on April 27 and instead appointed a special master to draw more neutral maps that would encourage competitive elections.

That process was overseen by Judge McAllister, who also delayed the primary election for Congress and State Senate by two months, moving it from June to August to allow time for the maps to be drawn and candidates to campaign in the new districts.

The Democratic Congressional Campaign Committee then attempted to back a challenge against that delay in federal court but was denied and Judge Gary Sharpe of the Northern District of New York ruled on May 10 that those primaries would indeed be pushed from June 28 to August 23. (The statewide and Assembly primaries remained in June.)

On May 16, Jonathan Cervas, the court-appointed special master, proposed new district lines that threw the Democratic Party into turmoil. According to the court filing, it created eight competitive congressional districts (instead of three under the legislative proposal, and in reality there were more this year) and, in some cases, it led to incumbent Democrats being pitted against each other. “Both the congressional and state senate maps have a substantial number of competitive seats (far more than in the unconstitutional maps) and are going

to be responsive to the public will,” Cervas wrote in his report on the final maps. 

On May 20, Cervas submitted new maps with minor alterations that were approved by Judge McAllister. The final maps, he wrote, “remain almost perfectly neutral, meaning the maps do not favor or disfavor any political party.”

The Blame Game
Democrats have laid part of the blame on the Court of Appeals, with a four-member majority of conservative-leaning justices nominated by Cuomo, including Chief Judge Janet DiFiore (who recently retired from the court).

“I think it's fair to say that there could be disagreement about whether the lines in particular for a particular house of the State Legislature or Congress may have had some pieces of it that needed correction,” said State Senator Michael Gianaris, who is co-chair of LATFOR and chair of the Democrats’ State Senate campaign committee, in an interview on Gotham Gazette’s Max Politics podcast in July. “But to say that the Legislature had no power to draw the lines at all, which is what the Court of Appeals ultimately did, is completely out of left field and not in keeping with the very explicit direction of the state constitution.”

“If the decision was simply, ‘the lines for Congress were drawn impermissibly, in an impermissibly partisan fashion,’ the remedy, according to the constitution, is send it back to the Legislature with direction to do it differently,” Gianaris added. “That didn't get to happen because the court just took it out of the Legislature's hands entirely in an extra-constitutional manner.” 

Experts agree that the redistricting process is inherently flawed, but they don’t agree that the new maps are the reason behind Democratic losses. 

“The real issue is that Democrats lost seats in New York that Joe Biden won by 10 or 15 points,” said Michael Li, senior counsel for the Democracy Program at the Brennan Center for Justice, in a phone interview. Indeed, Biden performed well on Long Island where Democrats saw crucial House defeats on Tuesday. He won Nassau County in 2020 by nearly 10 points while losing Suffolk County by just 232 votes to Donald Trump. “If you look around the country, almost nowhere else do they lose districts that Joe Biden won by 10 or 15 points, which suggests that Democrats underperformed in New York compared to Democrats elsewhere,” Li said. 

“As people go through the post-mortem, trying to figure out whether that's because of candidates or campaigns or some of the political dynamics around crime or other issues, but I suspect that all those are ultimately more to blame for Democrats’ failure than redrawing the maps,” he added. 

Li has also insisted that Democrats failed to take the opportunity to present remedial maps when their proposal was struck down by Judge McAllister, which could have helped them achieve their goals. And when they proposed maps to the special master, they again hewed close to their original proposal, which was bound to fail.

It's unclear whether Democrats would have prevailed if they had gotten their way with redistricting, he noted. For instance, the 4th congressional district, covering southern Nassau County, was marginally more Democratic under the special master’s map than under the Democrat proposed one, but nonetheless went Republican in the general. 

“I think if Democrats are looking for a scapegoat, they need to look inside,” he said. 

Jeffrey Wice, senior fellow at the New York Census and Redistricting Institute at New York Law School, had his own criticisms for the redistricting process but did not attribute Tuesday’s election results to it.

“The redistricting process was designed to fail from the beginning,” he said in a phone interview. “We were dealing with a commission designed by Andrew Cuomo and the Senate Republicans…who put into the plan, into the redistricting process, so many bells and whistles and twists and turns to make a positive outcome impossible ranging from having no tie-breaker, creating ridiculous rules depending on who controlled power in the Assembly and the Senate, to having separate staff directors and operations.”

Wice did say that the “four conservative judges” who make up the majority on the Court of Appeals “misunderstood the law” by denying the Legislature the ability to draw maps after the redistricting commission failed and that Democrats demonstrated in their arguments before the court that their maps were not overly partisan. 

“I think the criticisms of the redistricting process are slightly overblown in terms of what the Democrats did, but the process itself was an inevitable failure designed to end up where it did,” he said. “And unless it’s changed, we can see the same thing happen over again.”

Among some Democrats as well, blaming redistricting seems to be far too simplistic. Harry Giannoulis, president of The Parkside Group, one of the main consultants for the State Senate Democrats, has argued against the rationale that Democrats overreached in the redistricting process. “The claim that NY Dems should've just gerrymandered a little less is bizarre,” he tweeted on November 13. “Assembly made its own lines & their majority decreased. Senate didn't & may stay the same. The Court pointed to the redistricting process not being followed as the main cause for overturning the lines.”

“The Republican Senate passed the bill creating that poison pill in anticipation of blowing up the process. Which they did by walking out,” he continued, referring to the Republican appointees on the redistricting commission. “Also, there is no evidence that in the original lines, the Dems would have picked up 5 Congressional seats. The whole conversation is absurd,” he added of all the fingers being pointed at New York over the national House picture.. 

Cuomo spokesperson Rich Azzopardi, similarly, defended how the new redistricting process was approved by legislative leaders and voters. “The people of the state of New York overwhelmingly approved a constitutional amendment creating this process,” Azzopardi told Vanity Fair. “If they want to blame somebody for this chaotic mess, there are plenty of mirrors in this town.”

There may still be further developments in the congressional redistricting issue. A group of voters filed a suit asking a state judge to order the commission to redraw congressional lines, submitting a second round of maps to the Legislature. The suit was dismissed in September but is being appealed.

Rep. Pat Ryan with Gov. Hochul (photo: Ryan Campaign)

November 13, 2022 - Max Politics Podcast: A Winning Formula for Democrats in Tough New York Races

Chris Walsh, campaign manager for Pat Ryan's two Hudson Valley congressional wins this year and Brad Lander's 2021 NYC Comptroller win, joined the show to discuss how campaigns work, how to win tough races, Democratic messaging, the specifics of Ryan's wins, 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.