United States: 2016 New York Legislative Session Update

Hearings, hearings, hearings. As is the case every year, marathon joint budget hearings on the various issues areas in the Governor's 2016-17 spending plan have consumed legislators during the end of January and beginning of February. While these hearings can be long and mundane, certain topics are often more contentious than others depending on the budget year.

This year's hearings saw lawmakers expressing frustration with Department of Transportation (DOT) Commissioner Matt Driscoll about the $20 billion proposed for DOT to spend on fixing roads and bridges throughout the state. Lawmakers were seeking a list of specific projects that DOT plans to undertake as part of its proposed 5-year capital plan. Driscoll told the legislative panel that while some $3 billion for state-owned highways and bridges and increases in mass transit funding will be included, the specifics of the plan should not be expected until March.

At the economic development budget hearing, lawmakers probed Empire State Development (ESD) president Howard Zemsky for updates on the state's START-UP NY program.  The workforce development budget hearing saw testimony concerning Governor Cuomo's proposal to increase the state's minimum wage. This testimony drew both praise and criticism from the legislative panel, largely along partisan lines.

Top court and administrative appointments. On January 21, the Senate unanimously approved Janet DiFiore to serve as the Chief Judge of the New York State Court of Appeals, the highest court in New York. As Chief Justice, DiFiore is responsible for oversight of the state's Unified Court System. DiFiore has an impressive legal background, as she previously served as Westchester County District Attorney, Westchester County Court Judge, State Supreme Court Judge and Chair of the Joint Commission on Public Ethics (JCOPE).

On January 20, the Governor also announced the nomination of Michael Garcia to serve as an Associate Justice of the Court of Appeals. He was quickly confirmed by the State Senate on February 8. Most recently Garcia had practiced law at Kirkland & Ellis and had previously served as US Attorney for the Southern District of New York.

Shifting to administrative agencies, in late January, Governor Cuomo announced the nomination of Maria Vullo to serve as Superintendent of the state Department of Financial Services (DFS). Vullo is currently of counsel at Paul, Weiss, Rifkind, Wharton & Garrison LLP. DFS is a powerful and relatively new state agency tasked with overseeing financial services in the state, including insurance and banking activities. Vullo's nomination is subject to Senate confirmation, which is expected to occur sometime in March 2016.

Finally, in early February, Governor Cuomo announced the nomination of Rossana Rosado to serve as New York's Secretary of State. Rosado served as the editor and publisher of El Diario, the oldest Spanish-language newspaper in the country, for almost twenty years. Her nomination is also subject to confirmation by the State Senate.

Political temperatures rising. As winter's chill settles on Albany, political temperatures are beginning to rise inside the State Capitol. The Governor recently made his long-awaited announcement calling special elections for April 19 to fill one Senate vacancy and three Assembly vacancies. Special elections will be held in the 9th Senate District (Nassau County), previously held by Dean Skelos (R); the 59th Assembly District (Brooklyn), previously held by Roxanne Persaud (D); the 62nd Assembly District (Staten Island), previously held by Joe Borelli (R); and the 65th Assembly District (Manhattan), formerly held by long-time Assembly Speaker Sheldon Silver (D). These special elections will also occur on the same day as Democrats and Republicans go to the polls to vote in New York's Presidential primaries.

The special election in the 9th Senate District will be closely watched by New York's political class, as many observers expect it to be a bellwether for control on the State Senate heading into the November elections. Assemblyman Todd Kaminsky (D), a former federal prosecutor, will be facing off against local attorney Chris McGrath (R), the former head of the Nassau County Bar Association. Expectations are that this special election could be the most expensive in State history, and given the election is the same day as the Presidential Primaries, a high voter turnout is expected.

On the legislative front, the Governor, Senate and Assembly are beginning to stake out their policy priorities. Assembly Speaker Carl Heastie (D) has begun to push a tax proposal that would increase taxes on those earning $5 million or more annually, while lowering rates for middle- and low-income earners. The proposal would also increase the Earned Income Tax Credit (EITC). The Governor and Senate leadership quickly threw cold water on the proposal, with the Governor declaring there was "no reason or appetite" to talk about taxes this year.

Senate Majority Leader John Flanagan (R) has also gone on the offensive. Flanagan has made clear that he is not willing to pass the Dream Act, even if linked with the education tax credit—which the Senate supports. Also not likely to make it through the Senate, according to Flanagan, is the current minimum wage proposal from the Governor. Other priorities for the Senate include eliminating the Gap Elimination Adjustment (GEA) and measures to promote job growth in the state. Senate Republicans have hinted that they may be open to supporting a paid family leave bill being pushed by Independent Democratic Conference leader Jeff Klein.

Looking ahead. State legislators departed this week for their two-week February break. They will return later this month to intensive budget negotiations, with both the Senate and Assembly expected to release their "one-house" budget proposals in early March. Budget negotiations between the Governor and legislative leaders from the Assembly and Senate will continue throughout the month, culminating in a vote on the final budget agreement before the budget deadline on April 1. Expect continuing updates from the New York Public Policy team during the month of March on the state budget.

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