Monday Morning Memo – Mar 23

Good morning from home…

As we wrestle with these new challenges, the O’Donnell Team remains committed to bringing you political intelligence and government insights to help you and your business navigate through these troubled times, and hopefully to identify some opportunities along the way.

Our new normal includes daily briefings from Governor Andrew Cuomo. The briefings have elicited some interesting responses (read about the crushes and critics) and usually Executive Orders, as well. Read all the Executive Orders here. One of the most recent orders—released on Saturday—requires all nonessential businesses to keep 100% of their workforce home (guidance on which businesses are considered essential can be found here) and covers mandatory social distancing procedures for everyone.

Last week began with Legislative Session being cancelled, but not until most lawmakers (and plenty of lobbyists) were en route to Albany. The decision to postpone voting on paid sick/quarantine leave and changes to the state’s primary petitioning rules came as Albany was reacting to the COVID-19 outbreak and to the news that two Assembly Members tested positive with coronavirus (since then, a third Member has tested positive). The decision was also driven by a dispute between the Legislature and the Governor. 

Session did convene on Wednesday in a near-empty Capitol, closed to the public and most staff members. Aside from the handful of legislators in the respective Chambers, most members watched Session from their offices, entering in groups to cast their votes. 

By the end of the day, the Senate and Assembly had passed three bills. One provides paid sick leave for individuals who are quarantined, another clarifies how ballot access will work now that Gov. Andrew Cuomo has suspended the collection of petitions, and the third was the Debt Service budget bill, authorizing the state to pay principal and interest on the various debts it owes. This is almost always the first bill in the ritual of the state budget.

If the briefings, Executive Orders, and warnings on cable news did not make it clear, this week revealed the fiscal toll on New York State from this crisis. First, the State Comptroller issued an updated revenue forecast showing a $4 billion to $7 billion delta from the proposed Executive Budget.

The Medicaid Redesign Team II held its final meeting and voted to approve the package of recommendations, an estimated $1.6 billion in projected savings through proposals like capping enrollment in managed long-term care plans and changing eligibility requirements for personal care services. However, State Budget Director Robert Mujica said that the new federal law will prevent some of the recommendations from the MRT from being implemented.  

In Washington, President Trump signed the Families First Coronavirus Response Act. This responds to the coronavirus outbreak by providing paid sick leave and free coronavirus testing, expanding food assistance and unemployment benefits, and requiring employers to provide additional protections for health care workers. Cuomo continues to be critical of a clause in the bill that makes billions in federal aid contingent on states not shifting Medicaid costs onto localities, calling out New York Senator Chuck Schumer and Appropriations Chair Nita Lowey by name.

Regarding that requirement, Cuomo said, “If I can’t change that, we can’t do a budget.” Nonetheless, Cuomo took time out last week to meet with stakeholders regarding bail reform. We still expect an on-time budget before April 1, likely with extensive power given to the Governor and the Budget Director to make mid-year changes as the financial picture becomes more clear. That said, any final New York budget deal will await resolution—and hopefully billions in aid—from the CARES Act.

This weekend, Senate Republicans continued to take steps to advance the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which is Phase Three in Capitol Hill’s response, including releasing legislative text on the $1 trillion-plus package and scheduling procedural votes on it. Yesterday a procedural vote failed, pushing an agreement further out of reach.

CARES Division A consists of the over $1.5 trillion in economic stimulus and stabilization programs. CARES Division B is comprised of an additional estimated $48 billion in appropriations for federal departments and agencies for coronavirus response efforts based on an emergency supplemental request by the Trump Administration earlier this week. 

Optimism that had grown overnight about reaching a final deal yesterday ebbed after a meeting between Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy. Instead of sealing a deal, Speaker Pelosi reported afterward that insufficient progress had been made and that House Democrats would proceed with drafting their own Phase Three bill, which they dubbed the Take Responsibility for Workers and Families legislation. It remains to be seen whether the move is intended to intensify negotiations on the Senate package or whether the House will, in fact, proceed separately from the Senate.

Mayor Resisted Drastic Steps on Virus – Then Came a Backlash From His Aides

For most of last week, as Mayor Bill de Blasio continued to urge New Yorkers to mostly go about their daily lives — sending their children to school, frequenting the city’s businesses — some of his top aides were furiously trying to change the mayor’s approach to the coronavirus outbreak. [Read more.]