Monday Morning Memo - April 25 - O'Donnell & Associates

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Governor Hochul Releases First TV Ads of the 2022 Campaign

Good Morning from Washington D.C….

Congress returns from their Easter recess today with plenty to do. One major item is Conference Committee negotiations to align the House and Senate versions of “China Competitiveness” legislation which would authorize billions in funding to bolster domestic semiconductor manufacturing and research on artificial intelligence, quantum computing, and other critical technologies. It will be up to the appointed members of the Conference Committee to ultimately decide what provisions make it into the final bill and legislators are already pushing for their priorities to be included. Last week, a pair of Democratic legislators published an op-ed on CNBC’s website calling on their colleagues to not only pass the legislation, but to pass it quickly.

Appropriations are also in full gear as earmark and appropriations requests are due from members to their respective committees this week. The budgetary practice of earmarks, or Congressionally Directed Spending, returned for the first time last year since being banned in 2011. Supporters see earmarks as an effective tool in cutting through partisan gridlock and getting money where it needs to go and emphasize that Members of Congress know best what in their districts should be funded while opponents claim earmarks are an avenue for government giveaways and wasteful spending. Either way, if you have an earmark request, we can help.

The political season is seeing some of the first major ad buys from both parties in anticipation of November’s mid-term elections. Super PACs tied to Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell have each purchased well over $100 million worth of airtime in competitive states such as Arizona, Georgia, Pennsylvania, North Carolina, and Wisconsin. Freshman Democratic Senators Mark Kelly of Arizona and Raphael Warnock of Georgia both put up impressive fundraising numbers last quarter, each reporting around $25 million of cash on hand.

Republicans are confident they will retake one, if not both, Houses of Congress despite having to defend more seats in the Senate than the Democrats do. Two of the most competitive seats Republicans have to defend are in Pennsylvania and Wisconsin, states won by Joe Biden in 2020. Their hope is that Democrats’ slim congressional margins, President Biden’s low approval ratings, and the historical precedence of midterm electoral defeat for the party in power will be enough to retake the levers of power in Washington. One of the most interesting states to watch is Ohio where Trump’s late endorsement of J.D. Vance has angered many Trump allies who are supporting Josh Mandel. Trump headlined a rally for Vance this weekend. Just as in the Georgia run-off elections in early 2021, Trump’s endorsement or anger may be the determining factor in who controls the Senate in 2023.

House Republican Minority Leader Kevin McCarthy was on the hot seat this past week after getting caught very publicly in a lie. McCarthy categorically denied reports that he suggested Trump should resign following the events of January 6th, calling the reporting “totally false and wrong.” The following day, New York Times released leaked recorded audio of a GOP House leadership call where McCarthy did in fact discuss Trump’s resignation, the 25th Amendment, and Vice President Pence not pardoning Trump in the event of his resignation. The question going forward will be whether this hurts his chances of becoming Speaker should Republicans take control of the House, a position he has long sought after, and is in line for as Republicans are very likely to win a majority in the lower house.

In New York State…

The biggest news was also political. A state Appellate Court ruled on Thursday that the electoral maps for the House of Representatives drawn by the legislature illegally favor Democrats. The decision stated “Democratic leaders in the legislature drafted the 2022 congressional redistricting map without any Republican input, and the map was adopted by the Legislature without a single Republican vote in favor of it.” The ruling gives the legislature just over one week to come up with new maps if the decision is not overturned on appeal. That case is expected to be heard sometime this week before the Court of Appeals, New York’s highest court. However, the good news for Democrats is that the appellate decision reinstated maps for the State Senate and Assembly that had been thrown out by a lower court judge. The chatter that the Court could delay Congressional primaries continues to grow.

Governor Kathy Hochul launched her first ads this week as her campaign for governor gets underway. Hochul, facing insurgent primary campaigns from both wings of her party, now seeks to effectively message what she has accomplished since rising to the governorship. She agreed to participate in a series of debates proposed by the Williams and Suozzi campaigns, though only two of the proposed six debates have been scheduled. The first will take place on June 6th hosted by WCBS.

A subsequent debate is scheduled on June 16th hosted by WNBC at their 30 Rockefeller Center studios in Manhattan. It was a sign of confidence from Governor Hochul’s campaign. The blowback over the Bills, Bail, and Booze Budget Budget as well as the Benjamin blow-up obscure the fact that Hochul remains the overwhelming favorite in June’s Democratic Primary. She has (and continues to) outraise her opponents while the budget includes lots of politically powerful results—in health care, education, economic development, green energy, and so on—for Hochul to campaign on and, as Jane Corwin and Bill McLaughlin already know, she is a fierce debator. Still, we will be tuning in.

It seems as though former Lieutenant Governor Brian Benjamin will in fact appear on the June primary ballot following his arrest and resignation last week. A Democratic lawmaker introduced a bill allowing a candidate to decline their place on the ballot in the event of a criminal indictment, life-threatening illness, or resignation of the office they seek, however the bill currently lacks enough support to pass. The Governor also threw cold water on the idea of asking Benjamin to move out of the state, which would have made him ineligible for the ballot.

State legislators return to Albany today following their two week, post-budget recess to address a variety of legislative topics in the remaining six weeks of session.

Here are the biggest issues to keep an eye on:

421a/485w- The controversial New York City tax program that aims to incentivize affordable housing did not make it into the final state budget despite a late push from the Governor. Lawmakers have until June to decide whether to renew the program, come up with a replacement, or let it expire.

Fossil Fuel Building Ban- The original version of the plan calls for all newly constructed buildings to be 100% electric starting in 2027. Many labor groups oppose the plan and say it will cause construction and rent prices to skyrocket in an already expensive New York City housing market.

Accessory Dwelling Units- Many New York City lawmakers, including Mayor Eric Adams, want to make changes to the city’s zoning laws to allow for basement apartments and accessory dwelling units. The plan failed to make it into the final budget but advocates still see this as an opportunity to help bring down housings costs by quickly increasing the housing supply.

Good Cause Eviction- This policy has been a priority for many progressives and would prevent tenants from being evicted without ‘good cause’. The plan stems from fears of an eviction crisis caused by the pandemic and the discontinuation of the eviction moratorium. However, landlords say the bill will decimate the State’s housing stock by making owning rental properties a losing proposition.

Clean Slate Act- Perhaps the largest criminal justice issue left to be dealt with, the Clean Slate Act was announced by the Governor in her State of the State address, but ultimately failed in Budget talks. The bill would automatically seal a person’s criminal record after meeting a set of post-release conditions.

New York Privacy Act- On the heels of comprehensive data privacy frameworks in Colorado, California, and Virginia—and amidst inaction on comprehensive data privacy policies in Washington—Senator Kevin Thomas and Assembly Member Linda Rosenthal have been leading the conversation on a groundbreaking “opt-in” data privacy framework in New York State.

NYC Mayoral Control- In April, Legislators decided to separate the conversation of Mayoral Control of New York City’s Public Schools from the State Budget and take it up before the end of session in June. Former Mayor Michael Bloomberg lobbied for and won control of the school system in 2002, replacing the Board of Education and network of local school boards, which he and many others deemed ineffective and sometimes corrupt. Since then, the Legislature has extended Mayoral control in various increments over time, generally leading to intense negotiations on the issue either in the Budget or at the end of session.

Fee for Service Carve Out of the Medicaid Drug Benefit- During the thick of the COVID-19 pandemic in April 2020, Governor Andrew Cuomo was able to include a host of provisions from the Medicaid Redesign Team II in the final budget. One of those recommendations, the FFS Carve Out of the Medicaid Drug Benefit, would decimate the 340B program, which provides critical funding to safety net providers across the State, leaving them with little alternative to fund critical healthcare in some of the state’s poorest areas. Advocates are fighting to find a solution before the Carve Out goes into effect April 1, 2023.

New York City Mayor Eric Adams still has his eye on public enemy number one- chocolate milk. The first term mayor is seeking to ban chocolate milk in NYC schools due to its high sugar content. This past week, Adams said “I think that the reports of my demise on this issue are falsely reported.” For now, Adams will let principals decide what type of milk is offered in their cafeterias but he is determined not to let this issue go. Until then, join us in a cold chocolate milk and we will see you in May.

-Jack O’Donnell

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