(photo via the Governor's Office)

As the state Legislature returns to session on Wednesday with Democrats in control of both chambers for the first time in a decade, State Senator Liz Krueger of Manhattan and Assemblymember Robert Carroll from Brooklyn are set to introduce a resolution that would amend the state constitution, adding new provisions to prevent and combat public corruption.

The resolution, first introduced late in last year’s session, would add a new section on state government integrity to the state constitution and would consolidate two agencies that are currently charged with monitoring and tackling corruption -- the Joint Commission on Public Ethics (JCOPE) and the Legislative Ethics Commission -- into a new New York State Commission on Government Integrity. The effort is aimed at dealing with a long-standing problem in New York state government that recently saw the leaders of both houses of the Legislature convicted of public corruption, along with many other legislators who were removed from or left office due to ethical issues over the course of decades.

“We think this is the way to create a truly independent ethics body,” Assemblymember Carroll said in a phone interview on Tuesday, shortly after a rally outside the State Senate chambers alongside Senator Krueger and a cohort of government reform advocates. One of the central criticisms of JCOPE, which was created in 2011, is that it is too closely tied to the governor and legislators to be effective, making it a limited deterrent and a weak enforcer.

The proposed resolution would have to be passed by the current Legislature and again by the next elected Legislature in the 2021-2022 session, after which it would be presented to voters as a ballot question for their approval. If successful during this session and in 2021, Carroll estimated that the new law could go into effect by January 2022.

It would create the new nine-member commission -- five of whom would be appointed by the judiciary; two appointments jointly by the governor, comptroller, and attorney general; and two by legislative conference leaders whose parties are the top-two voter getters in a previous gubernatorial election. The commission would be empowered to issue civil sanctions and censures against legislators, would be able to suspend, demote, or terminate a non-elected employee, and make referrals for criminal prosecution. It would also serve as an independent counsel to legislators and state employees seeking informal ethics advice that can later be used in their defense. Those who have served as political party officials, state employees or lobbyists within the previous three years would be barred from being appointed.

Though the proposal does not require Governor Andrew Cuomo’s support, Carroll hoped that it would receive it nonetheless. “I hope the governor sees this is a major ingredient in reforming our broken political system in Albany,” he said.

During the only general election debate against his Republican opponent Marc Molinaro, Cuomo had signalled support for reforming JCOPE. “Change begins with the thin edge of a wedge,” Cuomo said, using a phrase he has often employed, in this case to indicate that he was pleased to accomplish something on ethics reform, and can then use it to do more.

He added, “I believe we need more independence on JCOPE, I believe we need totally independent appointees and not necessarily representatives of both houses. I’d be open to a number of configurations, but they’d have to be independent.” In a statement on Tuesday, Hazel Crampton-Hays, a spokesperson for Cuomo, reiterated that stance, but stopped short of endorsing the Carroll-Krueger plan: “As the Governor has previously said, we are open to changes to the structure of ethics enforcement and we will review any proposals that are introduced.”

Both Carroll and Krueger, Democrats like Cuomo, argue that a constitutional amendment is essential, particularly with renewed attention in this last election cycle to the activities of JCOPE, headed by Seth Agata, a former Cuomo aide nominated by the governor and appointed as executive director by the agency's commissioners in similar fashion to his predecessors. The state agency, which monitors lobbying at the state level besides ethics violations, has been widely criticized as inefficient and overly vulnerable to political interference, while at the same time being entirely opaque to the public and lacking clear jurisdiction.

In particular, Krueger said the agency has failed to investigate incidents and allegations of sexual harassment, even when they are made widely known. For instance, in January 2018, then-State Senator and Independent Democratic Conference leader Jeff Klein was accused of forcible kissing a former staffer, Erica Vladimer, but JCOPE has yet to make clear whether it is investigating the claim and has not provided any information to either the public, press, or Vladimer in the year since since she spoke out. JCOPE officials have pushed back against such criticism, noting that divulging information about investigations is against the law. At a March 2018 meeting, Commission Chair Michael Rozen said the agency's silence does not indicate action or inaction. "No conclusions should be inferred by the Commission’s silence," he said.

The new agency, on the other hand, would have to establish a dedicated unit for sexual harassment investigations and would also have more expansive transparency provisions, being subject to the same Freedom of Information Law that currently applies to the executive branch (there are ongoing negotiations about extending FOIL to the Legislature).

Last year, JCOPE’s lack of transparency was put to the legal test. New York Republican party chair Ed Cox and Molinaro, the Republican gubernatorial nominee, sued the agency to force a vote on an investigation into Joe Percoco, the former top Cuomo aide who was convicted on federal corruption charges last year. During the trial, Percoco was found to have improperly used his executive chamber office while working on Cuomo’s campaign, but he was never investigated by JCOPE. On December 19, a state supreme court judge ruled that the agency must take a vote within 30 days and then inform the judge, though they were not ordered to release the details of the vote to the public.

“I don’t think that current model is working and I think we need to fix that...It’s just not designed to do its job,” Krueger said of JCOPE in a December interview. She and Carroll were joined at the state Capitol building on Tuesday by representatives of groups including Common Cause New York, Reinvent Albany, the League of Women Voters of the State of New York, the New York Public Interest Research Group, the New York City Bar Association, as well as a few legislators, such as Senator Jen Metzger and Assemblymembers Richard Gottfried and Carrie Woerner.

What remains unclear is whether the leaders of both legislative chambers will support the proposal. Requests for comment to Assembly Speaker Carl Heastie’s and Senate Majority Leader Andrea Stewart-Cousins’ offices went unanswered.

Note - this article has been updated to clarify that Seth Agata was appointed by JCOPE commissioners, not the governor. It has also been updated to include public statements made by JCOPE chair Michael Rosen about why the agency does not comment on investigations. 

(Photo: Michael Appleton/Mayoral Photography Office)

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

After an election where the issue saw little mainstream political attention, climate change and what to do about it has come roaring back to the forefront of the New York political scene. Whether it’s because of a recent federal report outlining the economic damage climate change will cause if left unchecked, because New York Representative Alexandria Ocasio-Cortez has used her bully pulpit to push a Green New Deal, or the potential for more action after Democrats won control of the state Senate, there’s increased attention on both new and old legislation to try to beat back rising oceans, extreme weather and their effects.

At both the state and city levels, efforts to combat climate change are likely to be significant topics of discussion in 2019.

New York State
Governor Andrew Cuomo, a Democrat starting his third term, has increasingly spoken out about the climate crisis during his time in office, even if his ideas and rhetoric haven’t always been what climate activists want from him. The state’s Reforming Energy Vision has set energy efficiency goals (a 600 trillion British thermal units efficiency increase) and renewable energy goals (50 percent of electricity) for the year 2030, and Cuomo helped to establish the U.S. Climate Alliance, a group of 16 states that have agreed to take measures to get their greenhouse gas emissions down to the level set by the Paris Agreement, despite President Donald Trump’s rejection of it.   

The governor also made news with a pair of announcements recently. First, he announced a new New York State Public Service Commission regulation that mandates utilities find ways to cut 31 trillion British thermal units of site energy (which is the heat and electricity consumed by a building), to move towards the goal of saving 185 TBtus 2025 (an energy efficiency framework that the governor said could create 50,000 jobs by 2025) along with an investment of hundreds of millions of dollars to develop better energy storage capabilities statewide.

Second, Cuomo gave a December speech outlining his 2019 legislative agenda, and called for a Green New Deal for New York, though he gave few details. While Cuomo’s Green New Deal is unlikely to look like a state-level version of the one Ocasio-Cortez is pushing nationally, the dual goals of such a program are reducing greenhouse gas emissions by enhancing renewable energies and creating green jobs.

In his speech Cuomo did lay out two central aspects of his Green New Deal vision, which he is expected to expand upon when he presents his State of the State policy book in January: getting the state’s electricity to 100 percent carbon neutrality by 2040 and eventually eliminating the state’s carbon footprint entirely. Cuomo also contrasted his belief and policy plans with that of the Trump administration’s attitude, saying that “federal government still denies climate change, remarkably turning a blind eye to their own government's scientific report.”

Still, his initial position falls short of what the state’s most vocal climate change activists are calling for. Those activists, who have formed the NY Renews coalition, reacted to Cuomo’s announcement by putting together a slick movie trailer with footage of climate disasters and a press release pointing out that electricity is 20 percent of the state’s total carbon footprint, all in service of continuing to push their gold standard: the Climate and Community Protection Act.

The CCPA, which has passed the state Assembly for three years only to be stalled in the Republican-controlled state Senate that is about to turn to Democratic hands, establishes what advocates have called a “climate justice” framework. In addition to setting legislative targets for the use of renewable energy (50 percent of energy statewide by 2030) and carbon elimination (100 percent fossil fuel free by 2050), the bill also directs any transition project getting state funding to pay a prevailing wage and directs 40 percent of whatever state investment goes towards climate mitigation efforts to go to low-income communities and communities most threatened by climate change. All of which, according to the bill’s prime sponsor in the Senate, state Senator Brad Hoylman, add up to what the Manhattan Democrat says is the best approach to a Green New Deal, “a three-pronged approach: jobs, labor [standards], and protecting vulnerable communities.”

What the ramp up to transition away from fossil fuels will look like is not laid out in detail by the bill, instead the text requires the creation of a New York State Climate Action Council and directs the Department of Environmental Conservation to establish greenhouse gas emissions limits and regulations to achieve those limits. The bill also establishes a Climate Justice Working Group, which would study how to expand renewable energy into disadvantaged communities and would “have a role in determining what that investment would look like,” Hoylman said.

Whether that means a heavy hand from the state or not is something that’s been up for debate, and a place where Cuomo’s proclamation means he may soon weigh in. In a previous interview with Gotham Gazette, three-time Green Party gubernatorial candidate Howie Hawkins -- who has been running on a Green New Deal for New York since the 2010 race -- suggested that it would take “a World War II-scale mobilization” to prevent catastrophic damage from climate change. “During World War II we nationalized 25 percent of manufacturing in this country to make sure we could turn on a dime to make the weapons we used to beat the Nazis. The private investor-owned utilities and energy companies, they haven't led the way to clean energy, so we may need more public ownership,” Hawkins suggested.

In Hoylman’s view, the state doesn’t have to seize the means of production or even take on the role of primary investor, as much as it should shape where the market moves money.

“I think it's a combination of private investment, but with some prodding by the state to direct investment into low-income communities and communities of color, which otherwise might be passed by the marketplace,” Hoylman said of getting renewable power infrastructure into low-income communities. “I see government's role as a corrective one and making certain that that we've solved the collective action problem, which is basically doing nothing and allowing the marketplace to proceed unabated and our dependence on fossil fuels to increase. That might be less expensive in the short term, but it’s going to be more expensive in the long term. And then secondly, protecting those New Yorkers who often get left behind in these types of transitions, in particular where they’re reliant on outdated modes of energy like fossil fuels.”

As the CCPA has languished in the Republican-ruled state Senate, and the years tick closer to 2030, Hoylman said he understands the need to move fast on the legislation when his party takes the helm.

“I think so,” Hoylman said when asked if it was imperative that the CCPA is passed in 2019. “You know, we're running out of time on a lot of aspects, but certainly, if we're going to move as quickly as other states like California, we need to pass this bill as soon as possible.”

Hoylman also said that he is sensitive to the challenge that Democrats have in passing the CCPA and the Climate and Community Investment Act, which would help fund transition efforts through a carbon tax, while avoiding the pitfall of looking like the tax-hiking and regulation-spewing liberals Republicans warned they would be, but that inaction would be even worse.

“I think a Democratic Senate will be very sensitive to raising taxes of any sort without a real understanding of what the point behind them is,” Holyman said. “We think the Climate and Community Protection Act actually creates revenue, given the costs associated with climate change, so I would ask, ‘what is the cost of us not doing anything.’”

While the governor hasn’t signaled a position on the bill, and seems to have left the specifics for his Green New Deal for his State of the State, Hoylman praised moves that Cuomo has made on the climate with his executive powers, like establishing a commitment to 2.4 gigawatts of offshore wind power by 2030 and banning fracking. With both houses of the Legislature and the governor himself invested in the larger idea of transitioning away from fossil fuels, Hoylman said he sees a paradigm “that will push Albany to act more decisively on the issue.”

Whatever any final Green New Deal for New York looks like will be a product of negotiations between Cuomo and the Legislature, possibly as part of the late March or early April state budget agreement for the next fiscal year.

The new chair of the Senate’s Environmental Conservation Committee, State Senator Todd Kaminsky of Long Island has said he is excited to get to work fighting climate change. “In the face of climate change and the dire threat it poses to New York and our planet, our State must emerge as an environmental leader and demonstrate that we understand the urgency at hand and the need to act accordingly," Kaminsky said in a statement to Gotham Gazette. "I plan to hit the ground running as chair to take more aggressive steps to protect our environment and New Yorkers, including holding hearings on the Climate and Community Protection Act, and enacting legislation in support of other resiliency and renewable energy efforts.”

As Kaminsky indicated, while the CCPA is the main event of this year’s legislative session when it comes to climate change activism, there’s a lot on the undercard that the state has been grappling with. While public transit is usually thought of as the domain of New York City and the surrounding metro area, and the governor’s Buffalo Billion II program doesn’t have the cleanest lineage, advocates for a Buffalo light rail expansion are hoping Senator Tim Kennedy’s place as chair of the Transportation Committee will mean more funding for expanding the system as the city determines the best path forward.

Elsewhere, the state is pushing for renewable energy with an RFP out asking for vendors to deliver 800 megawatts of offshore wind power (with winners to be announced in the spring of 2019) which was a goal in Cuomo’s 2018 State of the State book, and the NY-Sun initiative, which offers education and financing for solar projects and has supported almost 90,000 solar projects around the state.

There’s also the New York Green Bank, which has invested over $500 million in areas like community solar, energy efficiency and storage projects. The Cuomo administration has continued work on its RetrofitNY project, an effort to find ways to affordably and scalably retrofit multifamily buildings in order to cut their emissions, although the effort hasn’t made it out of the “proof of concept and design phase yet.”

Outside of the Legislature and the governor’s mansion, there’s also the ongoing argument over Comptroller Tom DiNapoli’s management of the state pension fund, which is worth more than $200 billion. Environmental advocates have pressed DiNapoli to divest the state’s pension funds from fossil fuel companies, a move that they say would not only hurt companies who contribute to greenhouse gas emissions, but also make the state pension fund more money. DiNapoli, for his part, has argued against making any sudden, sweeping moves without studying their impact, and that he has a fiduciary duty to get the best return possible for the state, while also putting $10 billion in state pension funds in a low-emissions and clean energy indexes. He’s also argued that by being an activist investor, he can push the companies toward more climate-friendly policies.

New York City
There are also proposals for New York City to take action, independent of the state, with ongoing action to cut emissions and a pair of high-profile bills that were introduced at the end of 2018. The de Blasio administration has included climate change in the OneNYC agenda, setting goals to make New York “the most sustainable big city in the world” and “the most resilient big city in the world.”

Part of OneNYC is the de Blasio administration’s target for emissions cutbacks, the goal of reducing greenhouse gas emissions by 80 percent by the year 2050. The Mayor’s Office of Sustainability put out a Roadmap to 80x50 in 2016 that set a path for emissions reductions by way of energy standards for buildings, expanding the use of renewable energy, increasing the use of mass transit and reducing the amount of waste sent to city landfills.

The city is set to begin construction on the “Big U,” a coastal resiliency measure made up of parkland and berms around lower Manhattan to protect it from flooding, in spring 2020, according to the most recent news provided by the de Blasio administration. The updated plan for the flood protection, which involves raising the East River Park, has been criticized though, for making the project costlier in what critics say is an effort to not inconvenience drivers on the FDR Drive and avoiding dealing with the Parks Department’s lack of any kind of post-storm maintenance budget.  

After the mayor got out ahead of allies and even his office with proposed energy efficiency mandates regarding retrofitting and caps on the amount of fossil fuels buildings can burn, the exact ideas he’d proposed never really took off. But, a recently-introduced pair of bills from Queens City Council Member Costa Constantinides run with the idea, and if passed, would introduce new emissions standards for many buildings 25,000 square feet or larger. Since large buildings account for two-thirds of the city’s greenhouse gas emissions, backers of the Constantinides bills see retrofitting large buildings by doing things like installing energy efficient HVAC systems, hot water heaters, and electricity and lighting, as one of the most effective ways for the city to cut those emissions 80 percent by 2050. The bills, which had their first hearing in December, would open an Office of Building Energy Performance that can set new buildings emissions standards and also establish a financing program to help the owners of some buildings finance efforts to retrofit their properties to reach the emissions targets the office sets out.

“We need to start where the emissions are, and these large buildings are the right place to do it,” Constantinides said at a hearing to introduce the bills, noting that while buildings larger than 50,000 square feet only make up less than one percent of the city’s building stock, they give off 30 percent of the city’s total emissions. However, while the bill’s supporters have praised the exemption of buildings with at least one rent-stabilized unit from the most stringent efficiency requirements as a necessary way to protect residents from potential rent hikes from upgrades counted as major capital improvements, critics have called the provision a major problem. (In the event that the state rent laws are changed to prevent landlords from passing MCIs on to rent-stabilized tenants though, organizations like New York Communities for Change have expressed support for writing buildings with rent-stabilized units into the law.)

Mark Chambers, director of the de Blasio administration’s Office of Sustainability, told the City Council that the laws could create over 14,000 jobs related to the efforts to retrofit buildings and praised the establishment of a New York City PACE financing program as a way to make sure that property owners themselves aren’t burdened by the efficiency upgrades.

Elsewhere, activists who started a campaign this summer to establish a public bank in New York City recently rallied at City Hall to connect the potential municipal bank with efforts to fight climate change on a local level. First, advocates say that taking billions of city deposits away from larger banks like Chase and Bank of America, who finance fossil fuel extraction with some of their money, would be as effective a strike against fossil fuel reliance as the city’s underway efforts to divest its public pension funds from fossil fuel stock. Additionally, advocates say that a public bank would allow for cheaper financing of small-scale renewable energy projects that will be necessary in the coming transition away from fossil fuels.

“Waterfront solar projects, community solar projects, all of those kind of projects could be funded more easily if the intermediaries that were trying to do the good work didn't have to go to their very limited pots of money or could get money out of somebody bigger who wasn't predatory,” Stephan Edel, the director of the New York Working Families Project at the Working Families Party, told Gotham Gazette.

And while Edel had praise for the pension funds and the state’s green bank as effective tools in the transition to a green economy, he also said that a public bank could lend to projects that return on their investment somewhat slower. “A public bank still has to make safe investments, has to make that limited return, but it can look at a longer term set of benefits and it can look at investments that can have a long-term benefit because it's not looking to get its return in a quarter or make nine percent,” he said.

As for the proposal’s legislative future, the New Economy Project’s Ali Issa told Gotham Gazette that the Public Bank NYC coalition is working with “an array of state and city elected officials, including Council Member Mark Levine” to put a proposal for the bank forward in 2019.

Levine, for his part, provided a statement saying, “though we have made progress divesting from the fossil fuel industry, we must go further. Our City should put its own money to work for New Yorkers through a public bank, which would supercharge investments in critical projects throughout the five boroughs, and return financial power to the people and businesses that need it most.”

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

Ben Max, left, of Gotham Gazette, and Jarrett Murphy, right, of City Limits

January 2, 2019 - Max & Murphy Podcast: Should Andrew Cuomo Run for President?

Governor Andrew Cuomo just gave his inaugural address for his third term, remarks delivered from Ellis Island that further sparked discussion about Cuomo's possible consideration of a run for the presidency. While Cuomo has said he's not going to run for president and signs largely say he means it, he also appears happy to continue to stoke the embers and may give the notion another thought after passing elements of a sweeping "Justice Agenda" that he has laid out and says he will pass in the "first 100 days" of 2019. The hosts discuss Cuomo's potential pursuit of the presidential nomination, including the cases for and against a Cuomo candidacy, the larger Democratic presidential field, and more.

Listen to the conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts, under "Max & Murphy," and listen to Max & Murphy live on Wednesdays at 5 p.m. on WBAI radio, 99.5FM or wbai.org

Cuomo & de Blasio celebrate Amazon to NY (photo: Kevin P. Coughlin/Governor's Office)

1. Will Kirsten Gillibrand and/or Michael Bloomberg run for President?

2. Will Andrew Cuomo explore a presidential run?

3. How will Chuck Schumer perform as Senate minority leader amid a new power dynamic in Washington? What impact will Rep. Alexandria Ocasio-Cortez have as she officially takes office and the year progresses? What other New York representatives will make significant impact in the new Washington, especially given new powerful committee roles? Will Gateway funding from the federal government come through? Are there other major decisions related to federal funding or policy that impact New York?

4. How will Cuomo’s third term start, with major accomplishments, acrimony with legislators - both? How much of his outlined "first 100 days" agenda will he get passed in that time period?

5. What will and won’t pass in Albany before and through a budget deal at the end of March? Will the budget be on time? How will the changes in the federal tax code affect New York? Where will the areas of more easy agreement be among the legislative majorities and Cuomo? What subjects will prove most contentious? What will be left over to the legislative session after the budget?

6. Will the Reproductive Health Act sail through? The Child Victims Act (with what details)? Will marijuana be legalized and if so, what will the regulations look like? Will congestion pricing pass? The Dream Act? Which pieces of gun control will pass? What will the New York Green New Deal look like exactly? Will cash bail be abolished? Will anything be done about plastic bags? Will rent regulations, such as and especially vacancy decontrol, be reformed/eliminated/extended? Will there be hearings and real debate over single-payer health care (the New York Health Act)? Will there be any movement on granting driver’s licenses to undocumented immigrants? Will sweeping voting reforms actually be passed? Will there be strong new state government ethics and campaign finance laws? And so on...

7. Where will the annual fight over education aid land this year? What other key education battles will emerge? Will there be legislation related to teacher evaluations? Will anything happen regarding admissions to New York City’s specialized high schools? Will mayoral control of New York City schools be extended? What will happen with the charter school cap? Will mayoral control be extended to another municipality, like Rochester?

8. How will Andrea Stewart-Cousins perform as Senate Majority Leader and how will the new Senate Democratic majority run the chamber? Which new state senators will set themselves apart?

9. Will the Legislature hold tough oversight hearings? Will there be one on the MTA? Will there be hearings on sexual misconduct in government and the private sector? Will laws meant to prevent sexual misconduct passed in 2018 be strengthened in 2019?

10. How will Assembly Speaker Carl Heastie approach the new world order in Albany? How will Heastie’s relationship with Cuomo evolve? How hard left will the Assembly Democrats push?

11. Will state lawmakers take any significant action to change the outcomes of the decisions of the legislative and executive compensation commission?

12. How will Letitia James perform as Attorney General? Will her efforts to investigate President Donald Trump, his associates and enterprises, show results? Will she be the independent actor she has promised with regard to Governor Cuomo and other elected officials?

13. What next steps will Comptroller Tom DiNapoli take in his management of the state pension fund, especially with regard to fossil fuel companies and the question of divestment? How will DiNapoli approach his oversight role?

14. Who will be the next head of the MTA? Will the MTA be restructured? Can the next MTA chair, Andy Byford, Governor Cuomo and state legislators save the subways? Can they, along with Mayor de Blasio, resuscitate the buses? Will MTA labor and construction costs be reined in? How will the MTA’s capital needs be funded?

15. Can Cuomo and de Blasio work together productively on anything? Many things?

16. Will Mayor de Blasio regain some mojo? Will the mayor put forth new, exciting ideas?

17. Who will be the next Deputy Mayor for Housing and Economic Development? Will there be (m)any high-profile departures of top administration officials?

18. How will de Blasio’s programs evolve and proceed in 2019 -- will he adjust his affordable housing plan further? Will he figure out funding for the BQX by securing the federal dollars he says are needed? Can he again rethink his approach to homelessness to more quickly reduce the number of people living in shelters? Which neighborhoods will the city rezone in 2019?
Will crime continue to drop? Will the city become safer for pedestrians and bicyclists? Will the mayor do anything serious about street congestion?

19. What’s next in the process for Amazon to create a Queens campus? Will there be sustained protests? How will community outreach go? Will there be changes to the deal announced, like some planned return/investment of subsidies? Is there anything opponents, especially in the state Legislature, can do to stop or significantly alter the deal? How will the Cuomo-de Blasio alliance on Amazon evolve? Will they stay united in defense of the project or will the like-mindedness fray given de Blasio’s comments about subsidies?

20. What will be the result of the NYPD trial of Officer Daniel Pantaleo? Will anything larger change in how the NYPD deals with accountability for its officers? Will the state repeal or drastically alter the 50-a section of civil rights law that relates to making officers’ personnel records publicly available?

21. Who will run NYCHA? Will the federal government insert itself in a new, formal way? Will Mayor de Blasio appoint someone new as Chair? Will de Blasio and NYCHA move ahead aggressively with the new NYCHA 2.0 plan that de Blasio and others unveiled at the end of 2018?

22. How will Margaret Garnett perform as Department of Investigation commissioner? Will anything come of the reported investigation into whether Mayor de Blasio or City Hall officials interfered with a city investigation into the education yeshivas provide?

23. Where will things go with oversight of those yeshivas and new state guidelines to ensure they are providing substantially equivalent secular education to public schools?

24. Will anyone do anything about rampant parking placard abuse?

25. Will anything be done to help distressed taxi drivers in the city, especially with regard to medallion debt? What’s next in terms of regulating Uber/Lyft and such companies?

26. How aggressively will the city, the Department of Education and Chancellor Richard Carranza push local school districts to pass rezonings and changes in admissions policies aimed at racial integration? What will happen with de Blasio’s Renewal Schools program? How will the rollout of de Blasio’s “3-K” program proceed?

27. Who will be the next New York City Public Advocate (the election is February 26!)? Who will run in the fall election for that same position?

28. How will Speaker Corey Johnson perform as acting Public Advocate from January 1 to February 27? How else will Johnson make his mark in 2019? Will he give a State of the City speech and announce bold proposals? What will his push for city control of the subways and buses look like? Will the City Council pass bills the Mayor doesn’t agree to? Will it force the Mayor to use his first veto since taking office?

29. What will be the key battles in the next city budget negotiations? Will de Blasio and the City Council take steps to increase savings and reduce spending?

30. What will the 2019 New York City Charter Revision Commission put on the November ballot? How will those proposals fare? Will there be major overhauls to how New York City does its budgeting and/or land use? Will there be instant-runoff voting?

31. Who will be the next Queens District Attorney? Will there be competitive races in the Bronx or on Staten Island for those two DA positions?

32. Will Chirlane McCray’s political plans become clearer? Will we get any sense of what Mayor de Blasio is eyeing post-mayoralty?

33. What will be the next steps in the early 2021 mayoral campaign -- will Corey Johnson join Scott Stringer, Ruben Diaz, Jr., and Eric Adams as candidates clearly intent on running? Who else might float their names or signal their exploration? Who will take the first steps toward running for City Comptroller in 2021? Who else will emerge as candidates for the various borough president positions? (We know Jimmy Van Bramer is running for Queens BP and Robert Cornegy Jr. is running for Brooklyn BP)

34. Will there be apparent jockeying to become the next City Council Speaker?

35. What steps will Republicans in New York take to remake the party and prepare for future elections? What role will 2018 gubernatorial nominee Marc Molinaro have moving forward? Can the party develop its bench, and better line candidates up for citywide, statewide, and other key positions? Can it set the groundwork to regain the state Senate in 2020? Will the state party and party leaders rethink their approach to President Trump?

This article has been updated.

(photo: Edwin J. Torres/Mayor's Office)

As we usually do around this time of year, Gotham Gazette asked New York politicos to look into their crystal balls for predictions for the year ahead. Below you'll find insights from elected officials, advocates, analysts, and others who are tuned in to New York politics.

We know that 2019 will be interesting given that Democrats are taking full control of state government, there's a new New York attorney general, there will be a new New York City public advocate, the MTA and NYCHA must be rescued, and more. But what *exactly* will happen? Read below for some ideas.

Before (or after) seeing this year's predictons for 2019, revisit last year's predictions for this year, and see who did well and who didn't.

The new round of political predictions, these for 2019, is below.

Have something to add to the conversation? Tweet @GothamGazette with your prediction for 2019 in New York Politics

Predictions for 2019 in New York Politics

Eric Adams, Brooklyn Borough President
-Meatless Mondays will take the city by storm, and government agencies will take a fresh look at their food procurement policies, with both public health and climate change in mind.

Marc Molinaro, Dutchess County Executive
-Legislature will assert and restore constitutional balance between the branches of state government.
-New Senate Majority won’t care about on-time budgets.
-Governor will yearn for a Republican State Senate.
-Governor legalizes marijuana but no one will get high.
-Child Victims Act adopted before April 1.
-Mets win the World Series!

Keith Powers, New York City Council member
-The L train closure will cause transportation woes, but construction will remain on schedule in 2019. Consider me an optimist.
-The City and State will take on voting reform ahead of 2020, including early voting in the state and ranked choice voting in the city.
-City Hall hosts a Yankees World Series parade in 2019.

Carol Kellermann, president of Citizens Budget Commission
-The City Property Tax Commission makes a proposal for a more fair and transparent property tax structure and it is enacted by the NYS Legislature.
-In its upcoming contract negotiations the TWU proposes a three year wage freeze to help address the serious fiscal stress on the MTA.

Kathryn Wylde, president of Partnership for New York City
-Business and labor will unite behind Governor Cuomo’s bold plan to restructure the MTA and fund its modernization with congestion pricing and smart legislators will bite the bullet and sign on.

J.C. Polanco, professor and former Republican candidate for public advocate
-The new Senate Majority will soon experience growing pains the likes Mike Seaver wouldn't even fathom. They'll discover that New York is diverse and I am not referring to race, gender or ethnicity. If it is not less New York City-focused and more New York State focused, many of those suburban districts won during the blue wave may revert to the GOP.
-This is the year that we see Ruben Diaz Jr. and Scott Stringer begin to cement their positions as top two candidates to succeed Mayor de Blasio.
-After being elected attorney general, sky is the limit for Tish James, now clearly the one to beat for governor in 2022. She will gain national prominence as she puts into action what she has promised us all along -- a complete Mueller-style investigation into the Trump Organization, with subpoenas and indictments flying out of her office en masse. If the Democrats win the White House in 2020, no question she would be in the short list for U.S. Attorney General.

Boris Santos, chief of staff to State Senator Julia Salazar
-The State Assembly plays an integral role in thwarting legislation that they would have otherwise passed during the reign of the IDC (legislation that they'll pass the buck on: NYS Health Act and the Climate Community Protection Act). I hope the NYS Assembly proves me wrong!
-We'll bear witness to the biggest public action/rally in Albany by New York tenants only to see Governor Cuomo get rid of certain loopholes and not extend rent protections to every single tenant in our State. I hope the Governor proves me wrong!
-Mayoral control of schools gets extended but for the first time we'll get to see electeds (i.e. Senator Salazar and others) finally be creative and propose a revised governance structure to our educational system.

David Bloomfield, professor at Brooklyn College and The CUNY Graduate Center
-Replacement DOI Commissioner Margaret Garnett continues obstruction of governmental administration probe into de Blasio administration’s delay of Department of Education’s yeshiva investigation, eventually referring Mayor for criminal charges based on newly discovered emails.
-State Legislature maintains SHSAT admissions test for specialized high schools, creating new schools to expand enrollment in minority neighborhoods.
-Mayoral Control of city schools is renewed; Governor vetoes provision giving Community Education Councils new powers over charter relocations though current cap on new charters is maintained.

Jonathan Bowles, executive director of Center for an Urban Future
-The new Congress cuts a deal with President Trump that finally brings federal funding for a new rail tunnel under the Hudson River.
-Amazon comes to Long Island City after announcing that it will reject all discretionary tax incentives and make a major new investment to bolster subway service in Queens.

Bob Liff, senior vice president at George Arzt Communications
-Marijuana will be legalized by April, but the legislators will be so stoned they will lose the paperwork and fail to get it to the governor.
-The Staten Island secession movement will re-emerge, followed by a campaign to make New York City the 51st state, followed by an attempt by Brooklyn to reverse the 1898 municipal incorporation.
-Hipsters frustrated by the L-train closure will attempt to flock to Borough Park – it will not go well.
-The Mets will win the National League East.

Joanne N. Smith, Founder/CEO of Girls for Gender Equity
-In 2019, the youth of New York will continue to rise up and speak out against injustice, and they will be supported in their efforts by any politician who wishes to have a future in this state.
-We will win the fight to change policies that turn public classrooms into junior prisons and that our schools, workplaces and other institutions will begin to prioritize addressing sexual violence, thanks to the work of the 'me, too' movement and its partners.

Heath Brown, professor at John Jay College
-By summer, Beto O’Rourke, Stacey Abrams, and Andrew Gillum will all visit Manhattan to step up exploration of presidential runs in 2020. The "invisible primary" will be anything but invisible this cycle and the money race will be focused on demonstrating as much small-dollar as big-dollar fundraising potential.

Jeff Foreman, director for policy and advocacy at Care for the Homeless
-Assemblymember Andrew Hevesi’s Home Support Stability bill to increase the “shelter allowance” for people on assistance in New York for the first time in decades finally gets a vote, and if it’s enacted it’s a step to actually reducing homelessness in New York City.
-The 7 train continues it’s unreliable and way overcrowded service causing Long Island City residents (where I live) even more anxiety about Amazon and it’s huge new headquarters.
-Consensus is that the Mets will win the NL East, but of course they won’t.

Stefan Ringel, communications director for Brooklyn Borough President Eric Adams
-The winner of the public advocate special election will garner less than 20 percent of the total vote.

Marissa Hoechstetter, activist
-2019 will be the year of the survivor in New York State. Legislators at all levels of state and local government must listen to firsthand testimony of those directly and indirectly harmed by sexual harassment, assault, and abuse. Whether through long overdue, and as yet unscheduled, public hearings on sexual harassment in Albany, a hearing in the New York City Council about a proposed law allowing mothers like me to remove abusive doctors’ names from our children’s birth certificates, or an honest commitment by law enforcement officials [like Manhattan District Attorney Cy Vance] to act on behalf of those seeking help regardless of wealth, victim-informed laws and policies must be front and center for legislators and electeds. If not, constituents will vote them out.

Eli Valentin, professor at Monroe College
-Jumaane Williams and Melissa Mark-Viverito are the top two contenders in the public advocate special election. Mark-Viverito wins, making her the first Latina to be elected citywide.
-Recreational marijuana passes the Legislature and gets Cuomo’s stamp of approval.
-Legislators get their long-awaited pay raise, with limits (though not outright ban) on outside income.
-Nothing will be done, yet again, on much-needed election reform.

Aaron Carr, executive director of Housing Rights Initiative
-Vacancy decontrol will be repealed.
-Early voting will be enacted.
-The LLC loophole will be closed, eliminating a major liability for Governor Cuomo, who has long promised to close the LLC loophole only to become the biggest beneficiary of it since its creation.

Jonathan Ben-Menachem, policy and communications associate, Fines and Fees Justice Center
-Albany lawmakers will pass legislation repealing driver's license suspension for failure to pay fines and fees.
-Jumaane Williams will be elected New York City Public Advocate.

Have something to add to the conversation? Tweet @GothamGazette with your prediction for 2019 in New York Politics. (Review the predictions for 2018 here)

State Senator-elect Jessica Ramos (photo: Gotham Gazette)

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

Jessica Ramos won an unlikely victory in the Democratic primary to then cruise to victory in the general election and become State Senator-elect for her Queens district that includes neighborhoods like Corona and Jackson Heights. Ramos was part of a wave of challengers who unseated former members of the Senate's Independent Democratic Conference, a group of rogue Democrats who formed a power-sharing coalition with Republicans. As part of Agenda 2019 and on Manhattan Neighborhood Network, Ramos talked with hosts Ben Max and Jarrett Murphy about her top priorities and the new power landscape she's entering in Albany, where she will be part of the new Democratic majority in the Senate, her approach to Governor Andrew Cuomo, and much more. Watch:

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

Lt. Gov. Hochul at the REDC awards (photo: the Governor's Office)

In a recent radio interview, Lieutenant Governor Kathy Hochul highlighted the elements of Governor Andrew Cuomo’s newly-unveiled 2019 agenda that she plans to have a significant role in passing. Hochul also discussed and defended the administration’s Regional Economic Development Council program, explained her role co-chairing the new Childcare Viability Task Force, and discussed the timetable for a statewide $15 minimum wage.

As a guest on the Max & Murphy show on WBAI, Hochul zeroed in on the section of Cuomo’s agenda, which he outlined during a speech two days prior, concerning the lives of women. She hopes to help see the state codify Roe v. Wade abortion protections in the next session, to make sure contraception care is covered by health insurance, and to pass the equal rights amendment as part of the state constitution. “Something that is embarrassing that we have not done in our state is, actually, pass the Equal Rights Amendment, something we’ve been talking about for over a hundred years in this state,” she said.

Hochul also mentioned her work on the state’s plan to protect New York’s healthcare system from federal government efforts to end coverage for those with pre-existing conditions. She affirmed a Cuomo administration commitment to protect the coverage of pre-existing conditions for all and to “get prescription drug costs under control.” When outlining his legislative agenda on December 17, Cuomo included several elements related to health care coverage, such as codifying the state’s health insurance exchange that is part of Affordable Care Act programming.

Hochul called it “A very bold and ambitious agenda,” adding, “I love being part of an administration where we take on the big challenges. Nothing is too much for us.”

Other elements of the agenda Cuomo outlined include legalizing recreational marijuana, passing congestion pricing program for New York City, crafting a “Green New Deal” for New York, and much more.

In the interview Hochul also discussed the goals for the $763 million in state funding allocated through the Regional Economic Development Councils, which she chairs, in its 2018 round eight, and addressed criticism alleging a lack of transparency in the allocation process and a lack of clarity around effectiveness of the grant program in terms of the jobs it creates.

She said the Cuomo administration’s primary objectives with the REDCs are economic development and job creation. For example, she said the funds would be used for workforce development in underserved areas, job training, and revitalizing main streets in communities throughout the state.

“We’re making a difference, and the jobs are coming back,” Hochul said. “We have over 8.1 million jobs here in the state of New York. That is the largest we’ve ever had in our state’s history.”

This year’s $763 million will be split among 10 different regions of the state, each of which submitted proposals in the annual competition. The amounts allocated to each region range from $66 million to $88.2 million, the most being awarded to Central New York. The initiative will fund 1,055 projects statewide, Hochul said.

The program was created by Cuomo in 2011, his first year in office, and has been at the heart of the governor's plan to jump-start the economy, especially in areas of the state that have struggled the most. Overall, the program has allocated $6.1 billion for 7,300 projects, and created 220,000 jobs, according Hochul.

“It is no longer Albany dictating where the money goes, it is really bottom up,” Hochul said. “And that is what is really transforming New York, upstate in particular.”

The REDC program is not without detractors. Critics, including outside watchdog organizations and elected officials, have cited both a lack of transparency in the process of how taxpayer funds are spent and a lack of specificity in terms of job-creation reporting.

Both the Citizens Budget Commission and Reinvent Albany have criticized the REDC program, questioning whether people can clearly see the REDC grants, recipients, and results, especially job numbers. Reinvent Albany criticized the 2018 awards for only allocating roughly half of the money in the form of state grants, with the other half in Excelsior Job Credits and Tax-Free Bonds. She highlighted that the $763 million advertised by the program is not actually representative of the total grant money allocated. It called the program “essentially a publicity framework for the governor to award dozens of small and large batches of state funding from very diverse sources in a game show format.”

Hochul defended the program, stating that all the information about the projects can be found online. “It’s crystal clear where the money has gone, and how it’s been allocated,” she said, though she did admit that she wasn’t sure if the job information was available, which it is not. She sought to assure New Yorkers that she and the governor are “careful stewards of the taxpayer dollar.”

Asked about the Childcare Availability Task Force that was recently announced by the Cuomo administration, and which Hochul is co-chairing, the Lieutenant Governor said the task force is intended to develop solutions for the lack of affordable child care across the state. Addressing this need will help allow women to meet their earning potential, Hochul said. She said the task force would conduct research on how best to tackle a deficit in affordable childcare. Hochul stated that the taskforce would advocate for the inclusion of child care resources in the workplace and to reevaluate how much childcare workers are paid. Hochul added that it is nearly impossible for a single mother to raise children while paying for child care on a minimum wage, which, she said, has created a crisis.

On the minimum wage, Hochul was asked about the timeline for reaching $15 an hour for all of New York State. The program is being implemented in regional stages, with New York City set to hit $15 at the being of 2019. But the timeline for upstate is less clear, with the original schedule, which was agreed upon in the 2016 state budget that passed the current phase-in, did not include a definitive timetable. This despite the fact that Cuomo and others regularly say the state has a $15 minimum wage.

Hochul was adamant that “there is a path” that gets the wage to $15 statewide. But citing different variables in the cost of living for different regions of the state, she stated, “It will eventually get to $15 throughout the state, I believe that.”

[Listen to the full interview with Lieutenant Governor Kathy Hochul]

***
by Brendan Rose
@GothamGazette

Ben Max contributed to this story.

(photo: @MNN59)

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

Democrats won control of the State Senate in November and are set to take the majority in January, giving the party full control of state government. Senator Michael Gianaris, soon-to-be deputy leader of the conference, and newly-elected Julia Salazar, who will be the senator representing parts of northern Brooklyn, joined hosts Ben Max and Jarrett Murphy to discuss the year ahead, their individual priorities and where the Democratic majority plans to take the state.

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

Ben Max, left, of Gotham Gazette, and Jarrett Murphy, right, of City Limits

December 19, 2018 - Max & Murphy Podcast: Lieutenant Governor Kathy Hochul on 2019 Priorities

Lieutenant Governor Kathy Hochul joined the show to discuss the Cuomo administration priorities for 2019, including which issues she plans to be most involved with, the state's economic development programming, her leadership of a new child care task force, the minimum wage, and more.

Listen to the conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts, under "Max & Murphy," and listen to Max & Murphy live on Wednesdays at 5 p.m. on WBAI radio, 99.5FM or wbai.org

Gov. Cuomo (photo: The Governor's Office)

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

New York’s economy has seen several rosy years in the decade since the Great Recession, with a run of steady growth, increasing job numbers, rising wages, and reliable tax revenue that has defied historical trends -- and led to growing city and state government budgets. But 2019 may be the peak of that economic swing as economic experts predict a long-expected slowdown to set in before 2020. New York City, the experts say, seems better equipped to weather any adverse effects of slowing growth and the state may struggle, presenting some hard choices for Democrats who will fully control state government come January and have a long list of priorities, some of which have financial costs attached.

Also complicating the fiscal pictures as the state and city levels are projected budget gaps that must be closed, looming negotiations over how to fund the next MTA capital budget plan and its tens of billions of dollars to fix the subways, and the still unclear effects of recent federal tax reforms, among other outstanding questions. The finances of New York City continue to show a rosier picture than those of the state, with the city economy essential to the state’s ability to spend more each year, though the state has grown its budget in much more limited fashion than the city under Mayor Bill de Blasio.

In January, Governor Andrew Cuomo will present his State of the State address and executive budget for the fiscal year that begins April 1. Afterward, de Blasio will respond to the governor’s budget plan -- which will set the stage for negotiations with the state Legislature, de Blasio, and others -- and release his own preliminary budget for the next city fiscal year, which will begin July 1. Once the state budget is finalized, the city will be able to take its details -- funding levels, new mandates, and more -- into account as it creates its own budget. The specifics of the annual struggle over what the state is asking or requiring of the city are to be seen, though Cuomo has already indicated he plans to seek more money for the MTA from de Blasio.

Budgets are statements of values as much as they are financial planning documents and Cuomo and de Blasio, both Democrats, face pressure each year to balance their policy priorities with fiscal restraint, as well as the demands of others, especially members of the respective legislative bodies each must negotiate with. The governor prides himself on having passed eight on-time or nearly on-time budgets with a 2 percent cap on increased spending, though he is known to manipulate the numbers to say he has stuck to that limit even though some years he has not. De Blasio boasts of record amounts of savings, though watchdogs regularly say that he is not socking away enough given the extended economic boom while he is spending too much, especially in recurring costs like through a significant expansion of the city workforce.

The agreed upon state budget was more than $168 billion for the current 2019 fiscal year, with savings that are far too minimal according to every expert. And the mayor’s administration, though praised by fiscal monitors for its responsible financial planning, has overseen ballooning expenditures, passing a nearly $90 billion budget for fiscal 2019 -- it was $72.7 in the final year of the Bloomberg administration.

But New York City revenue is largely based on property taxes, which would remain relatively stable even in the event of an economic slowdown. The state on the other hand is far more vulnerable since personal income tax and sales tax contribute a bulk to state revenue.

Barring any unforeseen circumstances, the current economic expansion, the second-longest in the country’s history, will continue through most of 2019, bolstered by the federal tax cuts passed in 2017 (even if many New Yorkers’ tax burdens increase due to the new cap on state and local deductibles). It should allow both the state and the city to keep spending, though experts warn that both should prepare for what will happen down the line. Both the Cuomo and de Blasio administrations, along with the state Legislature and City Council, respectively, should be putting more money towards rainy day funds, fiscal experts say; particularly the state, especially as necessary infrastructure investments loom large and add to already rising debt obligations.

New York State
The state budget remains far more precariously placed in the case of a downturn, even though one isn’t expected to hit soon. The governor has reiterated in recent months that he will continue to abide by a self-imposed 2 percent limit on increased annual expenditures, which presents little wiggle room to add major spending initiatives, though it remains to be seen if the governor will employ one of his many budget maneuvers to obscure actual spending increases. For instance, the State Fiscal Year 2019 budget, which began April 1, included a provision that funnels Payroll Mobility Tax revenue directly to the MTA instead of going through the state, effectively shifting $1.5 billion out of the budget.

“Part of the problem is they’ve technically abided by it but they’ve only done that by shifting things around and reclassifying things, not necessarily through stringent cost controls,” said David Friedfel, director of state studies at Citizens Budget Commission, a nonprofit watchdog. “The more they play those tricks, the harder they will be to find in the future if that’s how they choose to close the gap.”

The New York State Division of Budget’s mid-year financial update, released in November, predicted that the state will meet its revenue projections by the end of the fiscal year. Even at the state level, budget gaps remain manageable, at about $3.1 billion for fiscal year 2020, a number that is quickly cut if the 2 percent growth is factored in.

State Comptroller Tom DiNapoli released his own financial update in November, estimating that overall tax revenues would decrease by 1.8 percent by the end of the state’s 2019 fiscal year (end of March). Though personal income tax revenues are expected to fall by 2.5 percent, business and consumption taxes are set to increase by a total of 6.5 percent, the report estimated. Tax revenues are expected to increase by 5.9 in the 2020 fiscal year and then at a lower rate, 2.4 percent in the 2021 fiscal year.

Similar to city representatives, officials in DiNapoli’s office said in a background briefing that they expect a soft landing for the economy, despite the volatility in national and international markets. They have yet to determine the full impacts of the federal tax code overhaul, which capped State and Local Tax (SALT) deductions at $10,000 annually, raising concerns that high earners facing larger tax bills would in some cases fold to out-migration pressures, leaving the state and taking their tax dollars with them. Given New York’s position as a high-tax state, even many upper middle class homeowners in expensive New York City suburbs, and in the city itself, will be facing increased tax burdens, though it is not immediately clear that these factors will lead to a significant increase in the number of higher earners leaving the state. New York has consistently seen out-migration each year and has lost a net of 1 million residents since 2010, according to The Empire Center, a think tank. A report issued by the center in March suggested that the state should undertake several reforms to encourage the economic competitiveness which could help reverse that trend.

The state took measures to decouple state tax provisions from the federal tax code, including decoupling from the SALT limit to prevent higher state taxes, and changes to the child tax credit and the single filer deduction. The state also created two new programs -- the Employer Compensation Expense Program and the State Charitable Gifts Trust Fund -- in an effort to limit state taxpayers’ exposure to federal tax changes, but neither program appears to have caught on in any significant way. Officials in the state comptroller’s office said the impacts of the SALT deduction in particular wouldn’t be evident until during next fiscal year, particularly if it encourages people to move out of state.

Other risks in federal funding to the state seen in recent years -- Republican proposals to repeal the Affordable Care Act and make drastic cuts to Medicaid -- have also mitigated, the officials said, since those proposals have failed to come to fruition. But federal funding does remain uncertain as Congress is in the middle of negotiating the current federal budget with President Donald Trump, who has threatened a government shutdown if Congress does not approve funding for a wall along the southern border that he had promised Mexico would pay for. The ballooning federal deficit incurred from the Trump-led tax cuts have also increased pressure on federal spending, which could trickle down to the aid that New York receives for transportation, health care, and education, among other things.

“The state is in decent financial position but not when you consider the fact that we are nine years or so into an economic expansion,” CBC’s Friedfel said. “The state has been gifted with $12 billion in financial settlements and some additional revenues yet the state’s reserves are not where they should be or could be. They haven’t been added to in about four years. And liabilities are still out there.”

As Friedfel noted, the state’s rainy day funds stand at only about $2 billion, a pittance when looked at in the context of a downturn. In the case of a recession, Friedfel estimated, the state could face up to $50 billion in combined losses over a four-year period. “California is doing a very good job on their reserves. They’re gonna have close to 10 percent of state operating spending in their reserves, which is really what New York should be aiming for,” he said. “Instead of $2 billion, we should be closer to $10 billion.”

As with the city, the state’s debt also continues to rise, particularly with the governor having launched an ambitious infrastructure program that includes modernizing existing facilities and building new ones across the state, including bridges, airports and bus systems. The state’s debt service payments for fiscal year 2019 stood at $5.5 billion and are projected to rise to $6.6 billion in 2020. New York currently ranks second-highest in the country, behind California, in outstanding debt.

Year after year, DiNapoli has waved a red flag over the state’s debt obligations and officials in his office are keeping a close eye on whether those will increase in the upcoming year. There will be particularly pressing needs -- the MTA, NYCHA -- where the state will have to work with the city to fund large capital improvements. The current 2015-2019 MTA capital plan remains underfunded and the Fast Forward Plan, proposed by New York City Transit President Andy Byford to modernize the city’s subway and bus systems, may cost nearly $40 billion, with no plan proposed to pay for it in its entirety. A congestion pricing program for New York City has been embraced by the governor and many in the state Legislature as a funding stream, but even if implemented quickly and without carve-outs it would fall far short of meeting the goal.

“That’s one of the biggest questions,” said Gelinas from the Manhattan Institute, “especially if the economy continues to do well. How much does Governor Cuomo go after the city for MTA funding and in multiple billions of dollars...and does that cut into the city’s other priorities?”

IBO’s Lowenstein also echoed that concern. “The state has a great deal of leverage over the city and its own fiscal concerns and it would be unreasonable to expect these issues get resolved without city participation.”

Last time Cuomo and de Blasio negotiated the MTA capital plan, the governor successfully convinced the mayor to significantly increase city funds for the authority. Cuomo has repeatedly stated publicly in recent months that he will be pushing the city to pay “its fair share” for the MTA. De Blasio has called for an added tax on high-earners to provide dedicated funding for the MTA, a proposal that Cuomo has publicly mocked as fantasy on several occasions.

The state Legislature next year will also include several newly-elected Democrats who expressed support for increased education funding, per the Campaign for Fiscal Equity decision, which could add billions to the state budget. The state Board of Regents recently proposed a $2.1 billion increase in education funding for next year, which would be a significant jump from the current fiscal year’s increase.

New York already spends nearly twice the national average on per-pupil funding, said CBC’s Friedfel, but doesn’t necessarily allocate funding to the districts that need it most. CBC has argued for changing the key formula, known as Foundation Aid, noting that many wealthy districts receive it despite already spending more than the national average and more than the already-high state average by leveraging local tax dollars.

Another open question is what the state will do with about $900 million in unspent or unallocated one-time funds from Extraordinary Monetary Settlements, recovered from the financial industry in the wake of the 2008-09 market crash. Since state fiscal year 2015, the state has received nearly $11.2 billion in those settlements.

Though the governor has repeatedly said he will divert those funds to capital investments, and he mostly has, he has also used them for budget balancing purposes, DiNapoli’s office noted.

“The governor should be putting much more money of any one-time revenue sources aside for the MTA, things like court settlements or just better-than-expected revenues,” Gelinas said, noting the dire need to fund the transit agency. “We haven’t put enough of that money aside for the MTA.” Cuomo has, on the other hand, dedicated financial settlement money to his signature infrastructure projects, like the new Mario M. Cuomo Bridge.

Unlikely to impact the next state budget, but certainly on the negotiating table in the new legislative year, is the push to revolutionize how New York provides health insurance and health care. Several legislators, long-time and newly elected, are pushing for the New York Health Act, which would establish a single-payer health care system in the state and could cost nearly $140 billion in additional state expenditure by 2022, according to a RAND Corporation study. Though the act could reduce total health care spending by 3 percent by 2031, the study found. Cuomo has said he supports a single-payer system, but has insisted that it should be implemented by the federal government rather than the state, and said that he does not see it make fiscal sense for New York.

New York already has one of the largest Medicaid programs in the country, comprising a huge chunk of the state budget (education and Medicaid are the two biggest spending programs). But enrollment has been relatively flat over the last three years. If that trend continues, Friedfel said, the state could find more savings in the budget.

Friedfel also noted at least one development on the horizon that could have a significant impact on state tax revenue. “The million pound gorilla in the room is what’s gonna happen with the state’s millionaire’s tax,” Friedfel said. The tax is due to expire on December 31, 2019, and though prominent elected officials have called for extending, and even expanding, the program, CBC’s position is that it should be allowed to sunset to help with the state’s economic competitiveness and to keep high-earners from leaving because of the SALT deduction cap.

While Cuomo has overseen its repeated extension and he has dismissed calls to expand it, during the recent election cycle he was mum about what he wants to do with the current millionaire’s tax.

New York City
The city released its latest budget modification in November, revising spending up by $1.4 billion, for a total of $90.56 billion for the 2019 fiscal year, which ends June 30. That marks a high point for city spending, and an $18 billion increase from before de Blasio came to power in 2014. The city’s Office of Management and Budget projects a manageable $3.17 billion budget gap -- the difference between expected revenues and projected expenditures -- for the 2020 fiscal year starting July 1. OMB expects that gap to rise to $3.36 billion for fiscal year 2022, the end of the current four-year financial plan period, by when expenditures are projected to reach a whopping $99.6 billion.

As City Comptroller Scott Stringer noted in his latest financial report released on Friday, OMB tends to issue more conservative estimates of revenues in upcoming years, allowing the administration more leeway to adjust spending. Stringer’s report estimates the budget gap to be lower, about $2.6 billion in FY2019 and $2.8 billion in FY2022.  

“We’ve come out of a run of a number of years of good economic conditions and good fiscal conditions here in the city...but we’re not seeing anything in the numbers that suggests it’s going to end anytime soon,” said Ronnie Lowenstein, director of the Independent Budget Office, a nonpartisan city-funded agency.

In a background briefing, an official at Comptroller Stringer’s office acknowledged that there’s significant uncertainty, with even the Federal Reserve appearing divided about where the economy is heading. There are mixed signals in the market -- unemployment is markedly low which should lead to higher inflation, but hasn’t.

But the comptroller’s office is cautiously optimistic and no economist currently projects a recession -- though one is never out of the question -- but rather a return to a slower rate of growth by the time 2020 rolls around.

“[We’re] expecting a great deal more softness in economic growth,” said IBO’s Lowenstein. “Not a recession but a much softer U.S. economy. And as far as the local economy’s concerned, we’ve already begun to see the weakening.” She pointed to the drop in job growth over the last few months and also noted that though the job market has diversified with more jobs created outside the financial industry than before the last recession, most of the new jobs have been in lower-paying industries.

But she said that slower growth won’t create out-of-control deficits. “We’re looking at gaps that are readily manageable, of the size that we’ve managed in the past,” she said.

The official from the comptroller’s office agreed that the city has the capacity to manage outyear budget gaps, particularly with a strong budget surplus each year that has allowed the city to maintain a healthy, if not optimal, level of reserves. The de Blasio administration put away added rainy day funds in the current fiscal year, responding to demands from the City Council. The result included a total of $1.25 billion in the general reserve, $4.35 billion in the Retiree Health Benefits Trust Fund, and $250 million in the capital stabilization reserve.

The city’s budget cushion has been increasing over the years and stood at about 11.2 percent at the start of the current fiscal year, though the comptroller has urged the administration to maintain levels between 12 and 18 percent, the lower range of which would have required more than $6.3 billion to hit the upper end.

There are of course various risks that the city must manage. One big vulnerability, according to the official from the comptroller’s office, is the size of the city’s workforce, which has added more than 30,000 workers under de Blasio.

“If you look at the November budget update...the biggest issue is the increased expected spending on labor,” said Nicole Gelinas, senior fellow at the Manhattan Institute, a think tank. She noted that the report increased the labor reserve for fiscal year 2020 by $704 million, for 2021 by nearly $1 billion and for 2022 by about $1.4 billion.

“It just shows that these labor agreements that the mayor is making with the unions are costing a little bit more money than expected,” she said. “So the basic story is if the economy keeps doing well, we can probably squeak by with balancing next year’s budget...but if the economy does fall into a recession, with the higher labor costs making these deficits a little bit bigger over the next few years, they would pose a bigger problem for the city.”

Gelinas said the city must take aggressive cost-cutting measures in labor agreements, particularly health care spending, to help avert layoffs and service cuts in the case of a recession. “Longterm, health care savings have to be much more aggressive,” she said. “The healthcare fringe benefit budget for the upcoming fiscal year will be almost $11.5 billion and it’s continuing to rise. It’s going to $12.5 billion by the end of the financial plan.”

“No mayor has ever gotten through two terms without a recession,” she added on the eve of de Blasio’s sixth year in office.

The city’s debt obligations have also been rising, owing to a massive capital program, which pays for building and maintaining the city’s infrastructure such as roads, parks, schools, and libraries.

“Debt service is one of the two big sources of growth in city spending,” said IBO’s Lowenstein, referring to the annual debt payments that are included in the city’s expense budget. “It’s debt service and healthcare, and they’re both big and they’re both growing very fast.” Debt service -- which is accounted for in the city’s annual operating budget -- is budgeted at a total of $6.8 billion for fiscal year 2019, according to the November update, and is expected to rise to $8.3 billion by fiscal year 2022.

Unlike most other municipalities, New York City’s capital program is funded entirely through borrowing, incurring massive debt that must necessarily be paid off every year, which could pose problems in the long run. “It’s less that we can’t continue to pay the debt service on the commitments that we’ve made but rather that they’re crowding out other things that the city might want to do,” Lowenstein said. “And our ability to expand those capital commitments is not unlimited. Especially in an era when interest rates are rising.”

Rising debt service also gives the mayor and City Council “less leeway to budget for other things ranging from teachers to cops to road repair,” she said.

Stringer has repeatedly raised the issue of rising debt, though it’s not yet out of control. The rule of thumb for his office is that debt service should not exceed 15 percent of tax revenues, a level it is well below currently. And the City Council has also attempted to make changes to the mismanaged capital funding process, creating a new subcommittee this year dedicated to examining the capital budget, finding ways to make it more efficient and reducing cost overruns. Upcoming City Council budget hearings may indicate whether that subcommittee and its focus are having any real impact.

But there are big items that may add significantly to the city’s capital investments and therefore create an additional debt burden. Those include funding for the beleaguered New York City Housing Authority (NYCHA) and the state-run Metropolitan Transportation Authority (MTA). In both cases, the city may have no choice but to commit billions more dollars, particularly pending the outcome of negotiations with federal officials over NYCHA and with state officials over the MTA, for which the city typically kicks in significant capital funds.

“The city may not have choices so the speed with which this occurs may be out of our hands,” Lowenstein said.

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

Note - This article has been updated to ntoe that the Capital Stabilization Reserve is $250 million, not $250 billion.