The From the Lobby podcast features a behind-the-scenes look at politics and government from New York State to Washington, DC with Jack O’Donnell, an Albany insider and Managing Partner of O’Donnell and Associates, a top lobbying firm that helps clients all over the country cut through government red tape.
Don’t be stuck on the sidelines. Get a front-row seat to what’s happening in politics with Jack! From the issues that affect taxpayers and business owners to the history of the budget process in New York, Jack has the knowledge and depth of experience to cut through the rhetoric and tell you what’s really going on.
Summary of this Episode
Guests
- Jack O’Donnell: Managing Partner at O’Donnell and Associates
- Joanna Pasceri: Director of Communications at O’Donnell and Associates
Major Topics Covered
• New York lawmakers released one-house budget proposals, with the Senate adding $13 billion to the governor’s plan.
• Major budget battles are expected over school aid, housing development, Medicaid spending, and criminal justice reform.
• The governor’s proposed AI innovation hub funding remains in both legislative budgets, but more details are requested.
• Final budget negotiations are now underway between the governor and legislative leaders, with passage likely to be slightly delayed past the April 1 deadline.
Full Transcript of the Episode
Note: This is a generated transcript. Please excuse any typos.
Joanna Pasceri 00:05
The game is on in Albany as budget negotiations kick into high gear. Hello and welcome to another edition of From the Lobby with Jack O’Donnell, a podcast with the inside track on what’s happening and politics from New York to DC. We are back with Jack, Managing Partner of O’Donnell and Associates, a Top New York lobbying firm to talk about the one-house budgets recently released by both the New York Senate and Assembly. How do lawmakers want to spend the state’s tax dollars and whose budget plan will actually win out? Jack is keeping a close eye on negotiations in the state capital. He joins us now with the highlights. Hi, Jack.
Jack O’Donnell 00:47
Hi, Joanna. Great to be back with you From the Lobby.
Joanna Pasceri 00:50
Great to hear from you. Lawmakers are now having their say on this budget with the state assembly nixing several items in the governor’s plan and the State Senate adding more than $13 billion to the executive budget proposal. So, is all this wishful thinking or a real possibility?
Jack O’Donnell 01:11
What a good question. The Senate and the Assembly both released their what we call one-house budgets which are their spending plans. But as much as that their priorities, their negotiating stances, their ideas, and jumping-off points. It’s a lot easier to say we’ve got more revenue so you can spend everything that your members want. And frankly, these don’t have to be balanced either or even pretend balanced. So, I think a lot of this is wishful thinking. I do think there are plenty of state senators and members of the State Assembly who do want to raise taxes, especially on the wealthiest New Yorkers. I think most of these proposals were from people who make over $5 million a year or corporations that make over $5 million a year in profit. But that said, the governor has been pretty adamant. And then we’ve seen this year since the early projections, New York State has done pretty well taking in some extra revenue. So, I don’t think we’ll see taxes go up.
Joanna Pasceri 02:20
Let’s talk about what you say was going to be the biggest battle over school aid. This is happening with the legislature reversing cuts and adding more spending over the governor’s plan. How is that going to turn out?
Jack O’Donnell 02:33
Well, we’re gonna hear a lot about this. I think that now that those budget resolutions have been adopted by the Senate in the assembly, you’re gonna see legislators fan out across the state. I expect you’ll see a lot of them standing with teachers, with the teacher’s union, with principals, and really talking about pushing back on the cuts, really kind of trying to take this to the governor. My guess is that there’s some sort of compromise. I mean, both the Senate and the Assembly, to a lesser extent, acknowledge that there do need to be some changes to the funding system. New York’s kind of hold harmless provision that no school district is going to lose last and I think is outdated. And a lot of these projections are based on where school districts were in 2000, and then they were updated in 2008. But, you know, population from the state overall has decreased. Right. Some areas have grown, others have shrunk, and so, I think those have real impacts. You know, the Senate talked about a study. You know, so I think something will give here, but I think not quite the extent of the cuts that were originally proposed by the Governor.
Joanna Pasceri 03:57
What about the efforts to increase housing? This was an issue that held up last year’s budget approval. Legislators support new development, like the governor, but with tenant protections, is this going to be an easy fix?
Jack O’Donnell 04:09
Man, housing is more and more complicated, and it’s so complicated in different parts of the state, but especially in New York City. You know, you’ve got all kinds of disparate factors from constructing new housing there and around the state. You know, there are proposals to convert office space into, you know, into apartments, especially as we’ve seen, you know, offices and work-from-home move up and become more popular. New York City also has an incredibly intense, affordable housing market and, you know, those owners have really been facing tough times as the state has made it really hard for them to update those apartments and get them back on the market. So there’s a lot going on here. And it’s not easy. There’s also a huge caucus of members in New York City who are opposed to any sort of additional subsidies for developers which certainly complicates things. And then there’s parts of the state where developers can’t make money without a subsidy. So, you know, there’s a lot going on here, the Governor did, you know, tweak her plan, she’s not coming in quite as hot and talking about the state being able to override municipalities. And so you know, I think that makes it a little easier to get something done. I think you’re gonna hear a lot about this over the next couple of weeks. But I’m not sure anything will get done in time for this budget. Of course, they can still do housing throughout the rest of the year. So, we’ll see, but more to come on that.
Joanna Pasceri 05:58
Healthcare costs are also a big concern with Medicaid spending, the largest expense for the state. The governor’s plan calls for major cuts to Medicaid, the legislature rejecting those, what is their plan? And will it work?
Jack O’Donnell 06:12
Yeah, this is, you know, this is another place, you know, sort of like education, right, the governor’s talked about forward cuts, because the amount of increased spending is just not sustainable. And the same thing is true around Medicaid. But what’s interesting is you got a number of legislators in both houses saying that the services that are being provided aren’t enough, and the people who’ve been covered aren’t enough. So, there’s just a really big pushback. I think, you know what we’ll see, again, we found some additional revenue for the state. So I think there’s a lot of room here for compromise. And instead of maybe cuts this year, some cuts in future growth, you know, some creative ways to try to limit increases going forward. But this is another one we’re watching really closely. And we’ll be diving deeper into it as the budget proceeds.
Joanna Pasceri 07:16
On the issue of crime, this senate has tweaked the governor’s plan to crack down on shoplifters, only wanting to target repeat shoplifters. Businesses are squarely behind the governor on this one. And is it enough to save this proposal?
Jack O’Donnell 07:30
Yeah, this is, this is another hard one. And this is why budgets and especially budgets that have policy in them, are really hard to do. You know, the fight last year over bail reform, and what that looks like, and other criminal justice measures, plays into this. The legislature and folks and advocates across the state have been, you know, really loud and adamant about not putting people in prison for low-level offenses. And if that’s necessary, not keeping them there for very long. You know, really pointing to some of the racial disparities in terms of arrests and jail time. And that’s really touched a chord across the state. Now, the governor is not saying that you know, we’re going to put somebody in prison for stealing a pack of gum. I think, you know, her point is to go after these organized rings, and really get the state police and local police and local law enforcement to coordinate these efforts to kind of break the big rings and the people who are reselling and some of that. But this is also really a political issue, right? I mean, we’re talking about a year where the majority in the House of Representatives kind of goes through New York State and goes through some of these congressional races. And I think the Governor and Democrats nationally are very cognizant of not looking like they’re soft on crime. And that’s really important, especially in some of these political suburbs, where those contested congressional races are. All of that a long with saying I suspect that there’ll be some sort of compromise here, too, that allows the governor and Democrats to declare that they’re drawing on crime and looking out for taxpayers. But at the same time, not going too far to readdress that balance, but we’re watching it closely.
Joanna Pasceri 09:34
Another interesting issue, the governor, she proposed to create an AI innovation hub in New York, that has been touted by you and many others as forward-thinking, yet this doesn’t make it into either legislative budgets. What’s behind this and will the governor fight hard to keep it?
Jack O’Donnell 09:51
Well, so it’s a little more nuanced. The governor has pushed for this and people across the state and country agree that it could be transformative. Look, I think there are a lot of folks who are scared about AI and scared about what it is, and maybe don’t like the fact that it’s already here and already taking over industries. But at the end of the day, both houses kept the funding for the Empire AI in their proposals. Both have asked for more details on how the money is going to be spent, what its use for, which isn’t a surprise, that’s always what the legislature does or asks for. And to be frank, the governor’s proposal really only contains two lines and sort of what this massive program is going to look like. So, I think that that’s reasonable, I think to get there. The fact that all the houses are prepared to spend the 250 million that is the state investment, that unlocks the private investment of 25 million for each partner institution. I think that’s enough to say this is going to go forward. And I think it’s going to be in Buffalo, which is great news for those of us in Western New York and for SUNY Buffalo, which, frankly, is already a real leader in this space.
Joanna Pasceri 11:11
Very critical to have the funding there. So, what’s the next step now that the one-house budgets have been released?
Jack O’Donnell 11:17
Well, this is really where the rubber meets the road. You know, I think people are still digging through them this week. But these are negotiating positions. And so now, now it’s time for the Governor, the Speaker, and the Majority Leader to sit down and talk and agree on some of the big stuff and then have their lieutenants and committee chairs and Programming Council work out the other details and get us to a budget. It’s go time!
Joanna Pasceri 11:47
I bet. Yeah, buckle up. It’s going to be an interesting couple of weeks as we head closer to that deadline April 1, your prediction is probably not on time. Correct?
Jack O’Donnell 11:57
My prediction is probably not on time, but not as late as last year. We’ll give it a week or two.
Joanna Pasceri 12:03
Ok well, it’s improving. So that’s good. Well, thanks for that insight, Jack, and stay with us for the inside track on what’s happening in Albany during this budget process by subscribing to this podcast. For the latest from New York and DC be sure to sign up for our award-winning Monday morning memo Jack’s weekly newsletter on politics and government with great insight too. Get that sent right to your inbox. Subscribe on our website at odonnellsolutions.com and for daily updates. Follow us on X, LinkedIn, Threads, and Instagram at O’Donnell and Associates. Thanks for listening, everyone. Thanks, Jack. We’ll be back from the lobby with Jack O’Donnell.
