CapCon: What Does N.Y.'s $1.3 Billion Budget Boost Mean? Judicial Conduct Report, This Week in New York History
New York is now anticipating $1.35 billion more in revenue than expected. What does that mean? Plus, a look a judicial conduct in New York, and what happened this week in New York history.
Good afternoon — it’s Monday, and National Grammar Day.
MONDAY, MARCH 4, 2024
TODAY’S CAP CON: Hochul and the Legislature are projecting an additional $1.35 billion in revenue over the next fiscal year. What does that mean for budget talks? The state’s judicial watchdog agency released their annual report as well, and we’ll tell you what happened This Week in New York History.
🔨 Is Tomorrow a Session Day? Yes.
❄️ Tonight’s Weather: Albany: Mostly cloudy, low 40s New York City: Chance of rain, mid-40s (National Weather Service)
💰 An Extra $1.35 Billion: Budget officials are projecting that New York will collect $1.35 billion more in revenue over the next fiscal year than what was predicted last fall.
That was the result of this year’s revenue forecast report, compiled between the top budget negotiators in the governor’s office, the Senate and the Assembly.
That means Gov. Kathy HOCHUL and the Legislature will have an additional $1.35 billion to play around with in this year’s state budget.
The new revenue projection is important because, heading into this year, New York was facing a budget gap of $4.3 billion — not the largest the state’s seen, but also not pocket change.
Hochul has proposed a few changes in how the state spends its money to fill that gap:
She wants to change how state funding is dispersed to local school districts, which would mean cuts for some districts that have seen enrollment drop.
There was also some underspending in the past fiscal year, giving Hochul an extra pot of money to help fill budget gaps for this year and the next few years.
Pre-payments, like spending on debt, would also help fill the gap.
💵 Not Unusual: It’s worth noting that the new revenue projection is similar to what we’ve seen the last few years. That’s according to Patrick ORECKI from the Citizens Budget Commission. We chatted Monday.
“It’s pretty much in line with what the last couple of years’ consensus reports have been, which is about $1 billion up,” Orecki said.
And, based on conversations I’ve had with key lawmakers, they were anticipating a bump in revenue projections well ahead of Friday’s report.
Senate Finance Chair Liz KRUEGER told CapCon last week that she was optimistic about where things were financially heading into negotiations.
And Assembly Speaker Carl E. HEASTIE told CapCon in early February that he expected revenue projections to be higher than anticipated.
So, what could the money be used for? That’s the $1.35 billion question.
Given that we’ve had similar bumps in the last few years, like Orecki said, I was curious if Hochul had displayed a pattern of what she likes to do with unanticipated revenue.
He said there actually has been a pattern there, where Hochul and lawmakers target that revenue toward future payments.
That helps cut down budget gaps in the outyears as well, he said.
“It’s mostly been used to do more prepayments,” Orecki said. “They’re usually things like, either debt service, or they plan to prepay some pension liability.”
That means if you were anticipating a series of new spending measures — like new or bolstered social programs — history is not on your side.
🎤 What Hochul Said: Hochul was asked about the new revenue projection Monday, and said she wants to be conservative with that spending.
Hochul has added funding to the state’s reserves in the past few years to prepare for an economic downturn. Last year’s budget brought reserves to $19.5 billion.
But she also wants to pull $500 million from those reserves this year to help New York City with migrant-related costs.
“People have been talking about a recession for a number of years,” Hochul said. “It may not happen for some time, and it may also happen next year.”
Hochul said the funding shouldn’t be put toward recurring expenses — things like school aid or new spending initiatives — because it’s impossible to know what next year’s revenue projections will be.
“If you add more recurring expenses, that commits us into future outyears,” Hochul said. “That could be problematic if we don’t get that same revenue.”
She also defended her plan, this year, to change how the state sends funding to school districts, pushing back on lawmakers who oppose the plan.
Hochul wants to change the Foundation Aid formula, which determines how much in state aid each district receives.
Members of the Legislature don’t want to approve a plan that would cut funding for any school district.
Last year’s state budget increased Foundation Aid by $2.6 billion — which Hochul touted as an effort to give schools state funding owed to them because of a lawsuit.
Hochul and lawmakers agreed to a $1.5 billion increase in Foundation Aid in 2022.
Hochul said it was unrealistic to expect the state to sustain increases of $2.6 billion or more every year. She’s proposing a $507 million increase in Foundation Aid this year.
“The thought that we could sustain that increase every year — I assumed rational people understood that can’t happen,” Hochul said.
💸 Taxing the Rich: But some members of the Legislature disagree, and are pushing again this year to enact higher tax rates on high-income earners.
The Invest in Our New York campaign — which advocates for those tax hikes to fund social programs and initiatives they see as underfunded — is back again this year.
The Legislature, in the past few years, has supported tax hikes for higher-income earners.
But that’s been a dealbreaker for Hochul, who fears an exodus of those individuals if their taxes go up.
Lawmakers are expected to unveil their one-house budget proposals next week, so we’ll know then if they plan to push for those new tax rates again this year.
But we do know that at least a handful of them are still in favor of the tax increase. I counted 17 members of the Legislature who gathered with advocates Monday for a small rally at the Capitol.
“It’s time to make sure everyone pays their part,” Assemblywoman Phara Souffrant Forrest said. “Elon Musk can fly to the moon!”
⚖️ Judicial Watchdog Report: The state Commission on Judicial Conduct received more complaints last year than at any point since its creation.
That’s according to this year’s annual report released Monday by the commission, which investigates complaints made against state judges, and can sanction them.
There were 2,982 complaints filed last year alone, the report said. That’s an increase of 22 percent compared to 2022.
Out of those complaints, 570 preliminary inquiries were conducted. Of those, 395 investigations were initiated.
That’s a lot, but it’s important to remember the commission can determine there’s not sufficient basis for an investigation. They can also clear the judge of misconduct.
But the commission also had a backlog of 204 pending matters at the end of last year, according to the report. So, more may come from those complaints.
Of the complaints they were able to process, there were 17 public decisions:
Four judges were removed from office by the commission.
Two were censured, and another two were admonished.
Nine judges resigned and agreed with the commission to never again seek judicial office.
The future of the commission’s bandwidth is unclear. The Hochul administration slashed their funding request before submitting it to the Legislature this year. I wrote about that in January.
Robert TEMBECKJIAN, the commission’s administrator and counsel, now has to convince the Legislature to negotiate with Hochul for more funding.
Key lawmakers have said they want to see the commission’s budget request fulfilled.
“[The commission] promotes both judicial independence and public confidence in the courts, by disciplining those judges who have engaged in misconduct, while exonerating those who have been wrongly accused,” Tembeckjian said Monday. “Hopefully, when the final state budget is enacted later this month, our resources will be suitably matched to our ever-increasing workload.”
🏛️ Weinstein’s Last Budget: Assembly Ways & Means Chair Helene Weinstein, a Democrat who’s represented part of Brooklyn and is considered among the most powerful members of the lower chamber, is retiring.
Weinstein is crucial to budget negotiations as chair of the Ways & Means Committee, which works behind the scenes on budget language and numbers.
She’s also one of the longest-serving members of the Assembly.
Weinstein took over as head of Ways & Means in 2018 after longtime Assemblyman Herman “Denny” Farrell retired. She was the first woman to hold the role.
It was also the first time two women led budget negotiations for their respective chambers.
In 2018, Sen. Cathy Young was Weinstein’s counterpart in the Senate; since 2019, it’s been Sen. Liz Krueger.
We likely won’t know who the next chair will be until December or January, when the Assembly announces changes in leadership, but if you have any guesses, let me know.
“After close to 44 years serving the residents of the 41st Assembly District and the people of New York, I have decided to retire at the end of this term,” Weinstein said. “It has been the greatest honor to serve as an assembly member.”
🔫 Red Flag Gun Law: The number of applications under New York’s so-called “Red Flag” gun law spiked last year compared to 2022, according to data from the state’s court system.
The law allows certain people to apply for an Extreme Risk Protection Order, or ERPO, when they believe someone could hurt themselves or others with a gun.
That order, if approved by a judge, requires law enforcement to remove all firearms from that person’s home.
About two years ago, Hochul and the Legislature expanded that law after an 18-year-old shot and killed 10 people in a racially motivated shooting at a Buffalo supermarket.
The shooter had been detained a year earlier for making threats at his high school, and underwent a psychiatric evaluation. He was cleared to go back to school.
After the shooting, Hochul and the Legislature amended the “Red Flag” gun law:
Health care practitioners who’ve seen an individual in the last six months are now allowed to file an ERPO.
Police and prosecutors are now required to file an ERPO if they have credible information that someone is likely to hurt themselves or others.
We don’t know if that led to last year’s spike in ERPO applications, but the state saw twice as many filed in 2023 (5,073) compared to 2022 (2,560), per state court data.
Hochul said Monday that applications filed by the State Police accounted for about a third of that.
State Police filed 1,385 ERPOs in 2023, she said.
That resulted in the removal of 2,549 guns from individuals.
“The number is extraordinary. It’s gone up more than 1,300 percent,” Hochul said.
State Police have already filed 290 ERPOs this year, Hochul’s office said. That’s resulted in the removal of 590 guns.
📖 THIS WEEK IN NEW YORK HISTORY: Every Monday, we’ll plan to tell you about part of New York’s history from years past. This research is from New York State Historian Devin Lander and the New York State Museum, so you know it’s legit.
March is Women’s History Month. For a list of events around the state commemorating Women’s History Month, please click here.
🏛️ March 4, 1993: Frances Perkins was the first woman to serve in a presidential cabinet position. Today marks the day she was inaugurated as secretary of the U.S. Labor Department during the administration of President Franklin Roosevelt.
Perkins was inspired to enter politics after the 1911 Triangle Shirtwaist Factory Fire.
She also worked as an advisor to New York Gov. Al Smith before she was chosen by Roosevelt.
🏔️ March 5, 1797: Philanthropist and U.S. Congressman Gerrit Smith, who dedicated much of his life to ending slavery, was born on this day in Utica. He was in Congress from 1853 to 1854 and ran for president three times.
Smith took advantage of a law passed in New York that gave Black men the right to vote if they owned land worth at least $250.
Smith handed out land deeds in the Adirondacks to Black New Yorkers so they would be able to vote and have a place to live.
🚂 March 10, 1913: Harriet Tubman was a New Yorker. You learned about her as pivotal to the Underground Railroad, a network used to help enslaved people escape southern states. Tubman died on this date at her home in Auburn.
She’s estimated to have brought about 70 people to freedom in the north.
She worked as a cook, nurse, and spy for the Union Army during the Civil War.
🚛 Diesel in State Vehicles: S1530A ORTT: Would require any diesel-fueled state vehicle to be replaced or retrofitted to run on renewable diesel made from biomass or biodiesel made from plant oils, animal fats, or waste oils and greases. (Amended)
❤️🩹 Home Care Pay: S6963A RIVERA: Would require the state Department of Health to set a minimum hourly reimbursement rate for home care providers to help establish an objective standard against which to measure negotiated rates.
🍁 Cannabis Shop Sales: S5346A SEPULVEDA: Would allow so-called “cannabis lounges” by permitting recreational dispensaries to also sell non-infused food and beverages. They could also sell concert tickets. (Amended)
🔨 Is Tomorrow a Session Day? Yes.
🕕Tomorrow’s Committee meetings (3/05):
Senate Banks | 10:30 a.m., LOB 710
Senate Consumer Protection | 10:30 a.m., LOB 901
Senate Corporations | 10:30 a.m., LOB 611
Senate Correction | 11 a.m., CAP 124
Senate Transportation | 12 p.m., LOB 708
Assembly Consumer Protection | 10:30 a.m., LOB 942
Assembly Governmental Operations | 11 a.m., LOB 623
Assembly Environmental Conservation | 12 p.m., LOB 623
Assembly Mental Health | 11 a.m., LOB 825
Assembly Health | 1 p.m., LOB 823
Assembly Local Governments | 1 p.m., LOB 838
Assembly Codes | 1:30 p.m., LOB 630
(If an Assembly committee is streaming, you’ll find that here.)
There are no hearings scheduled at the Capitol for Monday.
📝 National Grammar Day: A handful of you have sent me emails highlighting grammar mistakes I’ve made in the last few weeks. This day is for you, and I appreciate you.
Grammar exists in all languages, but today I learned there are an estimated 1 million words in the English language, per Merriam-Webster.
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