State enacts 2020-21 budget amid crisis

ALBANY — The New York State Fiscal Year 2020-21 Budget deadline was Tuesday, March 31. And while Gov. Andrew Cuomo and the state Legislature were not able to get the spending plan finalized on time — largely due to the coronavirus pandemic that has widely shut down the state — by April 1 the governor said he had “a conceptual agreement” with lawmakers; by Thursday, April 2, the Legislature had indeed agreed on a tentative budget. By Friday morning, April 3, lawmakers passed the $177 billion budget, but due to the pandemic and the unknowns associated with it, it did so with far less zeal and certainty than in years past.

The Legislature debated many late nights via teleconferencing and remote work due to social distancing, to hash out budget details.

According to the governor’s office, the budget authorizes a reduction in spending by $10 billion to deal with the economic fall-out of the COVID-19 pandemic. It  also “empowers the state budget director to develop a plan for across the board reductions and [to] implement that plan as necessary over the course of the year.”

“This is a moment in history unlike any other, and government needs to function and deliver results for the people of this state now more than ever — and that’s exactly what we did with this budget,” Governor Cuomo said.

Of course, much was in limbo till the very end of the process, as the state has been dealing with the pandemic; lawmakers expect the health crisis will have a devastating impact on tax revenue as all non-essential businesses in New York have been shut down for weeks and will for many weeks more, if not months. The loss to state coffers has been estimated at between $10 to $15 billion in lost revenue.

On April 1, the governor spoke of the painful process of making cuts to the budget, and said pragmatically during a press conference, “if we get more funding, we’ll increase allocations; if we don’t get more funding, we’ll decrease allocations.”

Middle-class tax cuts

Of utmost interest to New Yorkers, the state is continuing middle-class tax cuts. “In 2020, the third year of the multi-year tax cuts enacted in 2016, income tax rates have been lowered from 6.85% to 6.09% for taxpayers in the $43,000 to $161,550 income bracket, and to 6.41% in the $161,550 to $323,200 income bracket,” according to the governor’s office.

The cuts are estimated to save 4.7 million New Yorkers more than $1.8 billion this year. And income tax rates will continue to drop to 5.5% for taxpayers in the $27,900 to $161,550 tax bracket and 6% in the $161,550 to $323,200 bracket.

“When the cuts are fully phased in, middle-class taxpayers will have received an income tax rate cut up to 20%, amounting to a projected $4.2 billion in annual savings for 6 million filers by 2025. As the new rates phase in, they will be the state’s lowest middle-class tax rates in more than 70 years,” stated Cuomo’s office.

Marijuana, bail reform

Although details were slow coming throughout last week, Cuomo did announce before the budget was finalized that the legalization of recreational marijuana is off the table for the upcoming year.

Lawmakers did compromise on the state’s bail reform law. The law had caused concerns after New York City saw a sharp spike in crime, though supporters of the reform dispute a connection. While the governor and some other Democratic lawmakers wanted to reinstate judges’ discretion to hold more defendants believed to pose a danger to society pretrial, bail reform advocates claimed that doing so would result in judges sending too many people to jail unnecessarily.

Unable to agree, lawmakers dropped that provision. They did, however, add “several offenses that can be bail eligible, including sex trafficking offenses, money laundering in support of terrorism in the 3rd and 4th degree, child pornography offenses, repeat offenders and those who commit crimes resulting in death,” according to the budget document.

Early on, it was unclear if the governor’s call to slash Medicaid spending by a proposed  $2.5 billion in order to deal with a $6 billion budget gap
(that existed before the COVID-19 pandemic) was included in the budget. On Friday, after the budget’s passage, the state announced, “Medicaid spending will increase by 3%, or about $500 million, ensuring continuing high-quality care for the 30% of New Yorkers who rely on Medicaid for health care.”

Fracking, hate crime

A permanent ban on large-scale hydraulic fracturing was included in the budget, much to the relief of environmentalists. The use and distribution of Styrofoam was also banned.

“Gov. Cuomo and the New York State Legislature have forever protected our drinking water, environment and public health from fracking,” said Campaign Director of Frack Action Julia Walsh. “This is an historic achievement.”

Also, the administration’s effort to fight hate crime met with success. The Legislature agreed on the Josef Neumann Hate Crimes Domestic Terrorism Act. The law helps create a new felony charge for anyone who attempts to kill or seriously injure five or more people in an attack based on race, color, national origin, ancestry, gender, gender identity or expression, religion, religious practice, age, disability or sexual orientation. Cuomo first proposed the law late last year and has found broad support for it. It was renamed after the Rockland County rabbi who was killed in a Dec. 28, 2019 machete attack at a Hanukkah celebration at his home. Anyone convicted of the crime would face up to a life sentence without parole — mandatory if the attack is fatal.

Also passed, the New York Hate Crime Anti-Terrorism Act, which establishes a “domestic act of terrorism motivated by hate” crime as a new A-1 class felony punishable by up to life in prison without parole, according to the governor’s office.

Also OK’d, the ability for law enforcement to remove guns from the scene of a domestic violence incident.

Education

The fiscal plan maintains the current level of education aid to state school districts. It also allows the governor’s office to withhold some state aid to local governments depending on how much the current health crisis negatively impacts tax revenue

“Due to the extraordinary challenges from our COVID-19 health crisis, creating a $10 billion loss in revenue to the state, support for schools will remain nearly flat for a total of $27.9 billion in school aid,” stated Cuomo’s office.

State Assembly Speaker Carl Heastie (D-83) addressed the allocation, made possible through a combination of state support and funding from the recently passed federal stimulus package.

“An agreement was reached to hold the line on school funding, despite uncertain fiscal times,” stated Heastie, before adding some details. “The approved budget will maintain Foundation Aid at $18.4 billion for School Year 2020-21, the same level as last year. The budget will also provide $10 million in funding for mental health services in schools, which will be crucial in the year ahead. The spending plan includes a total of $18.5 million for bilingual education grants and $385,000 for training programs for teachers in bilingual/multi-lingual education.”

Additionally, $2.5 million in aid was restored to public libraries, for a total of $94.1 million.

Comments on the budget process

Before the Legislature tentatively agreed to the budget, New York State Senator Sue Serino (R-41) urged her colleagues to pass “a bare-bones budget that provides critical relief to New Yorkers in need and allows government to continue providing essential services” during the pandemic.

Cuomo said he addressed as much as he could, including expanding the prevailing wage. His budget was praised by state laborers.

“By including the expansion of prevailing wage in the budget, especially during such trying times nationwide, Gov. Cuomo, our Assembly and our Senate have proved their commitment to the backbone of our state — the men and women who build it and keep it running,” said Sam Fresina, Eastern New York Laborers District Council business manager. “This is an outstanding example of responsible legislating that uplifts New York’s middle class.”

New York Farm Bureau President David Fisher also said the governor did his best, in an April 2 statement.

“New York Farm Bureau understands the dire straits that New York state is facing in light of the COVID-19 pandemic. The deficits are real, not only for the expected projections for state government, but also for New York’s farmers who are seeing drastic drops in their customer base and commodity prices because of the virtual shutdown of our economy,” said Fisher. “The final budget deal is about as good as we could expect during these times.”

But New York State Republican Party Chairman Nick Langworthy blasted the enacted budget.

“In both process and product, this budget can only be described as a failure for New York taxpayers. While the national economy was booming prior to coronavirus, New York’s economy was already in dangerous territory with a $6 billion budget gap and the worst economic outlook in the nation,” he said Friday. “In the days and months ahead, Democrats controlling state government will try to attribute the economic devastation we will face solely to coronavirus — that is wrong. They will blame Washington and everyone else for their failures when they should have had a reckoning on the harmful policies that are stifling New York’s economy.”