United States: New York Legislative Session Update - Budget Proposals And A Buffalo Surprise

Assembly budget proposal. The Assembly one-house budget was a veritable mixed-bag, with a range of provisions included fully in line with the governor's executive budget proposal, while including others that push back against the governor's agenda—particularly as it relates to New York City.

The Assembly, in response to concerns from the health care sector about the potential impact of the $15 minimum wage included in the governor's executive budget, included in their one-house budget a $200 million reserve fund to assist health care providers cope with increased wages. Other health-care-related provisions in the Assembly's one-house proposal include an expansion of the state's recently implemented medical marijuana program through the doubling the number of dispensaries that a registered organization may operate. Both the Assembly and Senate rejected the governor's proposals to cut the state's Excess Medical Malpractice program, to end New York's spousal refusal program and to cap Medicare Part C cost-sharing limits. On the Senate side, their one-house budget included a requirement that the state refund providers after last year's collapse of Health Republic Insurance of New York.

On the education front, the Assembly, as expected, rejected the governor's proposal to shift a substantial portion of CUNY funding on to New York City. The Assembly one-house budget also includes provisions addressing the state's charter school sector, which charter advocates say would be potentially devastating. Included in the Assembly budget was a requirement that those charters not enrolling a certain percentage of high-needs students would no longer be fully funded with taxpayer dollars. The ever-present battle of mayoral control of New York City schools has also reared its head, with Senate Majority Leader John Flanagan (R) pushing to handle the issue as stand-alone legislation rather than in the context of the state budget—citing the fact that current legislation does not expire until the end of June. The executive budget proposal extends mayoral control of New York City schools by three years.

Along with the budget proposal, Assembly Speaker Carl Heastie (D) also included stand-alone legislation to address the ethics reform in Albany. The legislation focuses on restricting lawmakers' private-sector jobs by capping lawmakers' outside income. The outside income restrictions, while more modest than proposals from the governor, mark the first time a legislative leader has proposed such a limit. The legislation also addresses campaign finance, with a provision that would close the so-called "LLC loophole" by treating limited liability companies as corporations for the purpose of campaign finance. Senate Majority Leader Flanagan has asserted that ethics legislation should be addressed outside the context of the state budget.

Senate budget proposal. On the other side of the State Capitol, the Republican majority in the Senate released its one-house budget, which rejects the governor's proposal to raise the minimum wage. However, the Senate subsequently passed a budget resolution affirming that it will "consider an increase" in the minimum wage, but only after an economic analysis is conducted. As for the other big-ticket policy item from the governor, paid family leave, Senate Republicans included a paid family leave proposal in their one-house budget, despite concerns among some members of their conference. The Senate proposal closely mirrors the proposal put forth by the governor in January. Members have subsequently indicated they would like to first consider the policy's impact on small businesses and are interested in tweaks to the legislation, like a qualifying period.

In an interesting twist, the Senate GOP's one-house budget, while accepting the proposal from the governor to shift $485 million in annual operating costs for CUNY back to New York City, justifies the cost-shift by citing a lack of response from CUNY administration to several anti-Semitic incidents at City University campuses.

The Senate Republicans did offer New York City an olive branch, albeit with a twist. The Senate one-house budget provides that if New York City can adhere to the state's property tax cap, the Senate would agree to resume the state share of Medicaid growth. Currently, New York City is not subject to the two percent cap on the growth of property taxes that has applied to the rest of the state since 2011. There has recently been an increased push in Albany, particularly among Senate Republicans, to expand the cap to New York City.

There were also significant differences between the Senate and Assembly on energy policy. The Senate one-house budget aims to boost funding for financially struggling nuclear facilities to $100 million, while the Assembly budget increases a fund to support communities facing the loss of tax revenue after a power plant closes from $19 million to $50 million.

The week of March 21 will mark the second-to-last week of budget negotiations before the April 1 deadline. Legislative leadership and staff will be working weekends and late hours hammering out the details of the final budget. We expect more clarity a number of the issues outlined above as the week progresses, and will be providing updates as necessary.

Buffalo surprise. Shifting from the state budget to state politics, Senator Marc Panepinto, a first-term Democrat from Buffalo, unexpectedly announced this past Tuesday that he would not be seeking re-election in November. The senator cited his law partner's ongoing battle with cancer and the proposed limits on outside income for legislators as reasons for his decision not to run. The surprise announcement adds an interesting twist to the escalating battle for control of the state Senate, as the seat was held until 2014 by Republican Senator Mark Grisanti. Potential candidates for the seat include Erie County Clerk Christopher L. Jacobs on the Republican side, and Assemblyman Sean M. Ryan for the Democrats.

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