Monday Morning Memo – April 5

Good Morning from the State Capital 

Good Morning from Albany where it is now “March 36th” (or April 5th for the rest of the world) and many are asking “where is the State Fiscal Year 2021-22 budget?” Like much in Planet Albany, there were differing interpretations of the situation and how close a deal was heading into the weekend: on Thursday, insiders reported a deal was “very close” but on Friday,  Assembly Majority Leader Crystal Peoples-Stokes said, “I am at home. I do anticipate going back Monday.”  “Things are almost done, but there are a couple of things that need to be resolved,” she said of the 2021-2022 budget. Though she declined to discuss specifics. Last night, there were reports of a tentative deal on the outstanding issues around revenue, education/higher education, and several of the gaming pieces, but in Albany any “tentative deal” could completely blow up. Take anything you hear with a grain of salt and expect more on a final deal today.

So, where are we really? 

• What is done and in print: The Legislature and the Governor have agreed to trimmed down Article VII bills on Transportation, Economic Development, and Environmental Conservation (read it here), Health and Mental Hygiene (read it here), and Public Protection and Good Government (read it here), that they have not yet voted on, as well as the fairly non-controversial appropriations for the Legislature & Judiciary and the State’s Debt Service (Debt Service passed both Houses on Wednesday). Of note, all of the Article VII bills printed so far are significantly smaller than the proposals included in the Executive Budget (some issues may have fallen to the “Big Ugly” Revenue or Education, Labor, and Family Assistance Article VII Bills, so you will want to keep an eye out for that today).

What are we waiting on?

• Again, keep in mind that reports are circulating that there is a tentative deal between the Governor and the Legislature on revenue, gaming, and the education components that were outstanding, but until there is a FINAL deal, these items remain open and can change at any time.

• Tax Revenue & Education/Higher Education: The Legislature had wanted to raise $7 billion in tax revenue, while the Governor was proposing $2 billion. The Senate and Assembly have a long list of initiatives they want to fund—including “full funding” for Foundation Aid ($4 billion that advocates say is owed from the Campaign for Fiscal Equity Lawsuit in 2006), and universal Pre-K. Over the weekend, there were reports that talks could be settling around $5 billion in revenue raisers (but keep in mind a number of key progressives are pushing to hold the line on the $7 billion figure and that is not final). There will very likely will be more today on this.
• Gaming: The discussion on an expansion of downstate casinos and a Request for Information on how to expand (the State is nearing the end of the 10-year moratorium on Downstate gaming in the 2013 legalization of casino gambling) is alive but on “life support.” The larger conversation is mobile sports betting, the Governor has proposed a state-run model: “This is not a money maker for private interests,” Cuomo said in January during his annual State of the Budget address. “We want the actual revenue from the sports betting.” Under Cuomo’s initial proposal, the Gaming Commission would issue a request for proposals (RFP) to select one or more providers to offer mobile sports wagering in New York. However, the Legislature prefers a “competitive market” approach offering multiple skins. Another wrinkle is a late proposal to exclude Native American tribes from participating, which could exclude large parts of the State. A lot to work out, but over the weekend, mobile sports betting was still alive according to Senate and Assembly Gaming Chairs Joe Addabbo and Gary Pretlow. As of last night, it seems likely there will be a deal on mobile sports betting.
• Excluded Workers Fund: The Governor and the Legislature appear close to a deal on a multibillion-dollar fund to provide unemployment benefits to undocumented immigrants and former prison inmates who have been excluded from federal aid packages since the start of the pandemic. This is a top priority of Progressives. However, there is consternation amongst moderates:  a group of about 30 upstate, suburban & NYC Assembly Democrats met secretly on Friday, before a conference with the rest of their colleagues, to discuss their reservations.

In short, the devil is most certainly in the details. But while the Senate, Assembly, and the Governor debate the details, 39,000 state workers are in jeopardy of having paychecks delayed if an agreement is not reached today. Stay tuned…

In the Nation’s Capital…

In Washington D.C., President Joe Biden unveiled his massive $2.3 trillion infrastructure bill—the American Jobs Plan—last week, calling it a “once-in-a-generation investment” in the United States (Read what is in it here). White House officials said the proposal’s combination of spending and tax credits would translate into 20,000 miles of rebuilt roads, repairs to the 10 most economically important bridges in the country, the elimination of lead pipes from the nation’s water supplies and a long list of other projects intended to create millions of jobs in the short run and strengthen American competitiveness in the long run. The plan will also hasten the United States’ shift toward renewable energy and promote racial equity in the economy (including $20 billion to “reconnect” communities of color to economic opportunity). The costs would be offset by increased corporate tax revenues raised over 15 years, particularly from multinationals that earn and book profits overseas (which the President said was a nod to encouraging companies to on-shore and produce more in the United States.) 

While the Biden Administration has continuously preached its goal of garnering bipartisan support for the bill, GOP opposition to the package is strong (leading many to expect a budget reconciliation redux this spring). Republican Senate Minority Leader Mitch McConnell slammed the bill as a “Trojan Horse” for tax increases and said “my advice to the Biden Administration is if you want to do an infrastructure bill, let’s do an infrastructure bill, let’s not turn it into a massive effort to raise taxes.”

Even though there were more scandals in the press this week for Governor Cuomo—including that the Governor flouted state Public Officers’ Laws by involving top staffer Melissa DeRosa in the writing and publishing of his recent book on the COVID-19 pandemic, and another story detailing his breakup with longtime girlfriend Sandra Lee due to suspicions of infidelity—relative to the past month, it was a quieter week for the Governor. In Washington, there was a firestorm of allegations against Florida Rep. and conservative firebrand Matt Gaetz. The FBI has questioned several women on whether or not they were paid to sleep with the Florida GOP Representative. And the saga continued to grow more and more bizarre last week with increasingly salacious details coming out each day. We assume that continues to develop this week…

Other than that, Happy Dyngus Day!

-Jack O’Donnell

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