Cuomo, Legislature agree on $212B state budget

State Capitol
State Capitol
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The state Capitol in Albany.

Cuomo, Legislature agree on $212B state budget

State lawmakers scored major victories on taxes, education funding and aid for undocumented immigrants.
April 7, 2021

Gov. Andrew Cuomo, state Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie have agreed on a $212 billion state budget that comes nearly a week past the April 1 deadline.

The final spending package includes $2.1 billion in aid for undocumented immigrants hit hard by the pandemic, the legalization of mobile sports betting statewide and a dramatic increase in spending compared to the $177 billion budget approved last year. The state Senate voted into the wee hours of Wednesday morning and finished passing all 10 budget bills. The Assembly reconvened on Wednesday afternoon, and they were still voting into the early evening.

“We not only balanced our budget, we are also making historic investments to reimagine, rebuild and renew New York in the aftermath of the worst health and economic crisis in a century,” Cuomo said in a press release announcing the deal.

The budget also included a record $29.5 billion in school aid. The agreement contained $2.4 billion in rent and homeowner relief, $2.4 billion for child care and $1 billion for small business recovery, according to the press release. Lawmakers also passed an emergency appropriation to ensure government workers are paid on time despite the legislative delays.

The late budget was another blow for the embattled governor, who has prided himself for years on meeting the April 1 deadline over his three terms in office. Gubernatorial scandalslawmakers’ calls for him to resign and an ongoing impeachment inquiry overseen by Heastie have hardly made it easier to get a budget done this year. State lawmakers appeared to have taken advantage of his weakened political position to score big victories on taxes, school funding and a relief fund for undocumented workers.

City & State is still sifting through the final details, but here is where things stand on the top issues now that a final budget deal has been announced.

Taxes

The revenue budget bill introduced Tuesday night increases personal income taxes for people who make more than $1 million per year and joint filers making more than $2 million. There is also an increase in the corporate franchise tax rate for the next three years. According to Cuomo, these two changes will net the state an additional $3.5 billion this fiscal year and $4.3 billion per year after that. That is lower than the $7 billion in new taxes on businesses and the rich proposed in the legislative one-house budgets, but still a big victory over Cuomo, who originally pitched much more modest tax increases. At a press conference discussing the budget, Cuomo offered his own spin on the tax hikes, saying if the federal government repeals its cap on state and local tax deductions, high-earners will ultimately see their taxes go down.

Capital projects

The governor is getting $1.3 billion in financing to overhaul the Penn Station – with serious strings attached. The capital projects budget bill now includes language that seemingly precludes him from using the money to build big office towers like he had originally planned. Instead, the money can only be used to improve the station and cannot be used for “above-grade” construction following backlash from local legislators. The governor has also agreed to fund $285 million in repairs to roads, bridges and other infrastructure across the state. And he gets to control $150 million more in funding for the PAVE-NY program.

Public education

Democratic lawmakers scored a big victory over Cuomo after getting $1.4 billion in school funding into the Education, Labor, Housing, and Family Assistance budget bill that was introduced Tuesday morning. State lawmakers have also rejected his proposed consolidation of expense-based aids and attempts to replace state aid with federal stimulus money. The budget also includes a three-year tuition freeze for SUNY and CUNY students as well as a $500 boost per person in the Tuition Assistance Program. Additionally, the budget includes full funding for statewide, full-day prekindergarten.

Health care 

Cuomo’s original budget proposal had included around $600 million in cuts to hospitals, something he said will no longer be needed. He was also reportedly pushing a proposal backed by hospital leaders that would require insurers to cover more treatments without prior authorization. State lawmakers ended up rejecting both ideas, though they fell short of repealing Cuomo’s longtime “global cap” on the growth of state Medicaid spending. Lawmakers also delayed for at least two years a gubernatorial proposal to curb Medicaid costs by limiting reimbursements for prescription drugs bought by health care providers.

“Excluded workers”

Left-leaning lawmakers and activists had been pushing for $3.5 billion to establish a relief fund for undocumented immigrants, who were ineligible for other forms of state or federal aid. Pushback from Republicans and moderate suburban Democrats meant that the final budget allocation was reduced to $2.1 billion. Applicants will have to verify their identity, residency and work history to be eligible for one of the two tiers in the program, which will be administered by the Department of Labor. The higher tier of the cash assistance fund offers $15,600, with a $780 tax deduction, while the lower tier offers $3,200, with a $160 deduction.

Anti-Asian violence

Asian American leaders are not getting the full $19.5 million legislative package they had requested to combat violence against their communities, but the budget shows $10 million out of the $15 million going to community-based organizations. A gubernatorial press release confirmed the state Department of Health is receiving $2.5 million to improve its data collection.

Gambling

The legalization of mobile sports betting made it into the final budget. At least two betting platforms will work with at least four operators once they are selected through a request for application process. Applicants who team up with Native American tribes will receive preferential consideration. Revenues are projected to be in the hundreds of millions of dollars each year, with youth sports getting an annual cut of $5 million, and $6 million going to combat gambling addiction, according to a press release from Senate Democrats. A report on the feasibility of a downstate casino will be due from the state Gaming Commission six months after it concludes a request for information.

Environment

Labor unions are getting the prevailing wage and project labor agreements that they wanted for future renewable energy projects over 5 megawatts. The final budget will also include a $3 billion bond act to fund environmental restoration projects. A press release from the governor also touted $29 billion in public and private green economy investments, though a lot of thatmoney comes from outside of the regular state budget process.

Housing

Beleaguered tenants will not get their rent canceled per se, but they got a lot to gain in back rent from a $2.4 billion pandemic relief fundmostly financed with federal money. The final details appear to reflect what had been reported in recent days. The legislative language leaves it to the commissioner of the state Office of Temporary and Disability Assistance to determine the documentation necessary for eligibility, which is open to undocumented people. There is also an additional $600 million for homeowner assistance for those struggling with mortgage payments. The budget includes $100 million for the state to use in order to convert distressed commercial properties and hotels into affordable housing. But the exact nature of the program will be decided after the budget, which doesn’t include that language. A little clause tucked into the budget appears to allow tenants to have their rent canceled in certain situations. The New York City Housing Authority also got $200 million, a significant decrease from the $700 million proposed in the one-house budget resolutions. Several legislators from the city considered the amount that was passed to be insufficient.

Nursing homes

State lawmakers already passed a litany of reforms earlier this year, but additional changes came in the health and mental hygiene budget bill introduced Tuesday morning. This includes a new requirement that adult care facilities spend at least 70% of their revenue on direct patient care, with 40% of that spent on staff who interact with residents. The budget also places a 5% profit cap on nursing homes.

Low-cost broadband

In a priority of the governor’s that made it into the final budget, internet service providers will have a cap on the amount they charge low-income people for broadband internet service. Under the provision, they can charge no more than $15 a month for high-speed internet. Some people who will qualify include those eligible for Medicaid benefits and households eligible for free or reduced lunch.

Other items

The budget includes $1 billion for investing in small businesses hurt by the coronavirus pandemic, with $800 million in grants and $200 million in tax credits. It also keeps in place $400 million in scheduled tax cuts for the middle class, which Cuomo originally proposed delaying to save money before the state received $12.6 billion from the federal government.

Rebecca C. Lewis
is a staff reporter at City & State.
Zach Williams
is a staff reporter at City & State.
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