CapCon: Homegrown Weed, Hochul's Budget Adds, Cuomo v. COELIG, NY Numbers
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Good afternoon — it’s Friday, and National Caregivers Day.
FRIDAY, FEBRUARY 16, 2024
TODAY’S CAP CON: Homegrown cannabis, Hochul’s budget amendments, Cuomo v. Ethics Commission II
🔨 Is Monday a Session Day? No.
❄️ Tonight’s Weather: Albany: Mostly cloudy, mid-20s. New York City: Chance of snow, low 30s. (National Weather Service)
🍁 Homegrown Cannabis: If you’re at least 21 years old, new regulations approved by the state Cannabis Control Board Friday would allow you to grow your own marijuana plants at home.
The regulations have a 60-day comment period before they go into effect, so don’t go out and try to buy clones now.
Even if you went to Massachusetts to buy them, it would be illegal at the moment to grow them at home.
As the TU’s Brendan J. Lyons reported today, there was confusion over whether homegrown plants were allowed when cannabis was first legalized. They were not.
But something I found interesting in Brendan’s story is how state officials had previously said the regulations were delayed to prevent a situation in which consumers grew their own cannabis, and stunted the burgeoning retail market.
That market has been a slow burn for retail applicants, who remain frustrated about the state’s slow approval process.
The Cannabis Control Board abruptly canceled a meeting last month to “finalize review of adult-use license applications currently under consideration for approval,” the board said.
Even Gov. Kathy Hochul is displeased with the rollout, saying recently that she’s “not satisfied with the pace.”
Hochul also said her office got directly involved in the situation and told the Cannabis Control Board to “go back to the drawing board” and “work harder.”
But for more on the homegrown regulations, what would be allowed, and what’s not, check out Brendan’s story from today. (Free for CapCon subscribers.)
💰 Hochul’s Budget Amendments: The Hochul administration released their 30-day budget amendments late Thursday. It’s an opportunity for Hochul to change anything she’s proposed before negotiations with the Legislature begin in earnest.
Here are a few that stuck out to me, though there are more spelled out by the Division of Budget here.
Alcohol-To-Go: One amendment will be good news for fans of alcohol-to-go, which allows restaurants and bars to sell takeout cocktails.
The amendment would make that permanent.
It was first allowed during the pandemic. The Legislature then legalized it in 2022 for a period of three years.
The New York State Restaurant Association, a big proponent of the change, wants lawmakers to sign off on the proposal in this year’s state budget.
“From inflation to staffing challenges, our members face increasingly slim profit margins. There is a new battle each day and many will never get back the losses from the height of the pandemic. Simply put, every little bit helps,” NYSRA President Melissa Fleischut said.
Eye on AI: Another amendment would enact what Hochul’s calling the Artificial Intelligence Deceptive Practices Act. It would amend civil rights, penal, and election law.
It would establish a new right to privacy, in which it would be illegal to use someone’s likeness or voice for advertising or business without getting their written consent.
That would be a misdemeanor under the change.
The amendment would also allow a victim to sue if someone uses artificial intelligence, or any other software, to produce and distribute a pornographic image of that person.
Victims would be allowed to file for a court order that would require the website it’s posted on to take it down.
A different section of this amendment would specifically criminalize using AI to create child pornography. Possession would also be illegal.
Further down in the amendment, Hochul wants to make it a misdemeanor for someone to distribute an audio recording of someone engaging in “sexual or obscene conduct.”
Someone wouldn’t be exempt from this charge if the recording was created using AI, the language says.
It would also be illegal to coerce someone into producing, disseminating, or displaying that kind of content, including if it’s created using AI.
It would also create a new section of the state’s Civil Rights Law aimed at preventing someone from using artificial intelligence to mimic someone else, or pose as them.
This recently happened to Keith Wright, a former assemblyman who leads Democrats in Manhattan.
The change would allow victims to seek injunctive relief, punitive damages and compensatory damages in court.
This is also spelled out in a proposed change to state Election Law in a different section. If someone uses AI to create content geared toward influencing the outcome of an election, they would have to disclose that it was made using digitization.
That would be in the form of text-based disclaimers on visual content and voice disclaimers on audio content.
The use of AI would also be added to the state’s criminal statutes for identity theft. That means someone wouldn’t be able to escape those charges by claiming the images or content they used to impersonate someone were artificial.
And an entirely new criminal charge would be added for the “unlawful dissemination or publication of a fabricated photographic, videographic or audio record.”
But this also has a lot of exceptions, like if someone creates the content for satire, or for educational purposes.
This would be a class A misdemeanor.
Legal Aid Fund: Hochul is also reversing part of her initial budget proposal that would have transferred $100 million in funding targeted toward legal representation for low-income people, the TU’s Raga Justin reported today.
Hochul wanted to transfer that money to the state’s general fund, which is basically a big pot of money the state can reach in to with few limitations.
As Raga reports, Hochul sought the transfer because the account had $375 million in it.
For this one, I’m going to suggest you head over to Raga’s write-up for the whole story. Find that here. (It’s free to read for CapCon subscribers.)
Judicial Ethics: I reported last month that Hochul had slashed the funding request for the state Commission on Judicial Conduct.
The commission wanted a funding increase of $770,000. Hochul slashed that proposed increase to $184,000 before releasing her executive budget proposal.
The current operating budget for the commission is about $8.1 million.
Hochul did not change that request in her budget amendments, so the commission will now have to convince members of the Legislature to go to bat for that funding.
A coalition of good government groups, like the New York Public Interest Research Group, League of Women Voters, and Reinvent Albany, had panned Hochul’s move in a letter last week.
“Our groups support the [commission’s] request for $8.9 million to process its burgeoning caseload,” the groups wrote.
You can read more in my story from last month here. (Free for CapCon subscribers.)
👊 Hochul Hits Back: Speaking of budget, DOB is taking issue with a report released Thursday from the state comptroller’s office that said Hochul’s spending plan would “severely restrict the state comptroller’s terms and conditions approval of state PIT and sales tax bond issues.”
This one’s for the money nerds.
The report said Hochul’s budget “would significantly expand the executive’s powers, allowing for costlier and riskier bonding choices with state PIT (personal income tax) and sales tax bond issues.”
Budget spokesman Tim Ruffinen said Friday that DiNapoli’s argument was “without merit.”
“To insinuate that the Division of Budget is fiscally irresponsible is appalling and without merit. The state comptroller’s office should follow the law and not substitute their arbitrary judgments into the approval process,” he said.
The state holds an AA+ credit rating from S&P and Fitch, DOB notes, and debt metrics are better than they’ve been in decades.
The conflict is over the comptroller’s current power under state law to approve terms and conditions on private bond sales, including the PIT and sales tax bonds.
DiNapoli’s report claims Hochul’s budget would restrict those approval powers, which it says protect “taxpayers from short-sighted financing decisions.”
But DOB says they want the change after the comptroller’s office denied a transaction this year related to the MTA.
Last year, the Legislature approved a one-year authorization for the state to finance assets for the MTA for up to 50 years.
But they say the comptroller’s office denied that transaction arbitrarily after previously approving the terms and conditions for similar Thruway and MTA 40-year bonds.
Comptroller spokeswoman Jennifer Freeman responded to DOB in a statement Friday afternoon.
“Our independent review of the proposed budget is factual and objective,” Freeman said. “There are proposals that should be rejected because they will increase costs to taxpayers and greatly diminish oversight.”
DOB also wasn’t thrilled with part of DiNapoli’s report that said Hochul’s proposed budget would curtail the comptroller’s oversight powers. More on that in yesterday’s CapCon if you’re interested.
“The provisions highlighted in the report are in reference to only pre-audit reviews and the comptroller’s office has the legal authority to audit contracts after the procurement process is completed to ensure taxpayer dollars are spent properly if he so chooses,” Ruffinen said.
⚖️ Cuomo v. Ethics Commission II: Former Gov. Andrew Cuomo’s challenge to New York’s fledgling ethics agency was back in court Friday.
He’s suing the Commission on Ethics and Lobbying in State Government after the agency revived an effort to claw back the $5.1 million he earned from his pandemic-era memoir.
This time, the case was before the Appellate Division in Albany.
The five-judge panel will decide to either uphold or reverse a lower court decision that found the commission to be unconstitutional last year.
The judge who handed down that decision specifically invalidated the statutes that gave the agency its investigative and enforcement powers.
Cuomo’s attorneys say that, because the governor doesn’t control a majority of the appointees, doesn’t have the final say on their selection, and doesn’t have the power to remove them, the commission doesn’t clear the state constitution.
The ethics panel has 11 members: 3 chosen by the governor, 6 chosen by the Legislature, and one each chosen by the comptroller and attorney general.
But only the commission has the power to remove its own members.
Gregory Dubinsky, an attorney from firm Holwell Shuster & Goldberg LLP, represented Cuomo during arguments Friday. The judges were receptive to some of his arguments.
“The constitution doesn’t make an exception for the ethics laws,” Dubinksy said. “It says the governor is in charge of making sure the laws are faithfully executed.”
When asked what would make the commission constitutional, Dubinsky said the Legislature would have to pass an amendment to the state constitution codifying the agency’s structure.
“Amend the constitution,” he said “That's how the constitution tells us to resolve these issues.”
If lawmakers wanted to move ahead with that, they would have to pass the amendment twice: once this year, and once next year.
It would then be placed on the ballot for voters as early as November 2025.
Dustin Brockner, from the state attorney general’s office, argued that the ethics panel’s power should be restored because it was created in partnership between the Legislature and the governor.
Justice Mark Powers, a Hochul appointee, questioned that.
“How is it a partnership exactly when the governor has really no control?” Powers said. “It has the power to sanction members of the executive, but not the Legislature, which has always been an executive function. How is that constitutional?”
Brockner argued that Hochul has several avenues to control the agency, like investigative powers from her office, and the power to subpoena the panel.
He also said Hochul could seek to stunt the commission through the state budget process. She could cut funding for the commission, he said, or veto funding approved by the Legislature.
“If the Legislature sought to give the commission more money, the governor could veto that,” Brockner replied.
The case is expected to be decided by the appellate court in the coming months, but it likely won’t end there. Either side could seek to appeal the decision to the state’s highest court: the Court of Appeals.
Cuomo potentially has $5.1 million on the line, and plenty of money to spend on litigation.
The state is eager to defend the ethics panel, and hold it up as an effective ethics enforcement tool in state government.
Read more from my story on this today. (Free for CapCon subscribers.)
📝 The Number: $9.9 billion
Short Version: The projected state budget deficit in New York by 2028 under Hochul’s current financial plan, per the state Division of Budget.
Long Version: Democrats control the state Legislature in New York, and they like to spend money. Hochul is more fiscally conservative than them, but is also pitching an increase in spending this year.
With a projected budget deficit of $9.9 billion in just a few years, Hochul and lawmakers will have to decide how they want to fill that gap.
Broadly speaking, there are really only two options: cut spending, or find more money.
Democrats in the Legislature have said they’d support higher taxes on high-income earners to fill that gap and provide new funding for things like the MTA, statewide infrastructure, health care, and more.
Hochul thinks those earners will leave New York if the state hikes their taxes, and has instead turned to cost-saving proposals, like a change in how the state distributes money to school districts.
Okay, And: Budget watchdogs say it’s a situation that’s not going to resolve itself.
“The fiscal year 2028 gap widens to $9.9 billion, called ‘sizable’ by the governor. Yet, the state’s spending base is supported in part by at least $5.5 billion in temporary tax increases and pre-payments from prior year surpluses. Together, these reveal that the state’s structural gap is approximately $15 billion” — Andrew Rein, Citizens Budget Commission.
🐺 Protecting Wolves: A8295A CARROLL: Would require that killed animals which could be wolves be submitted for a DNA test to determine if they actually are wolves. The state could set a moratorium on the killing of canids in some regions.
✏️ Learning Loss: S8571 TEDISCO: Would create a new task force on pandemic learning loss in New York’s schools. A report would be due on that subject to the governor and the Legislature by the end of this year.
💈 Hair Care: S8573 WEBB: Would update the New York State Natural Hairstyling License to provide a stronger emphasis, and more training opportunities, on natural hair textures, hair care, and braiding.
🔨 Is Tomorrow a Session Day? No.
There are no events scheduled at the Capitol for Monday.
😊 National Caregivers Day: The third Friday in February celebrates health care professionals who provide long-term and hospice care.
New York has a shortage of home care workers, who earn about 40% less than workers in nursing care facilities, according to the left-leaning Fiscal Policy Institute.
They also say the shortage will reach 1.47 million workers by 2035, but suggest that could be prevented by raising wages for those workers.
More from the Times Union (Free for CapCon Subscribers):
Next move for Seven Springs unclear after state village laws change
Buffalo man sentenced for stealing nearly 100 parking meters
SUNY's chancellor makes it on a Harvard Crimson list of possible presidential replacements
The Times Union Bill Tracker: Your guide to key bills on the table in this year’s legislative session, compiled by the TU’s Capitol Bureau. Find it here.