Blair Horner's Capitol Perspective

A $7.6 Billion “Tax” That’s Not Part of the Budget

Posted by NYPIRG on February 13, 2017 at 9:17 am
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It’s not only winter in Albany, it’s budget season—arguably the biggest and most important job for the Legislature each year.  Once the governor proposes his budget, it’s up to the Legislature to decide how to react.  Every year, both houses of the Legislature hold joint hearings to look into what the governor has proposed.  This year is no different.

Virtually every working day since the last week of January up until President’s Day, hearings on various budgetary topics are taken up.  Usually the heads of the relevant state agencies testify first followed by various business and nonprofit interest groups and any members of the public.

The hearings are supposed to cover all aspects of the governor’s proposed state budget.

But some topics fall outside of the hearings.  One such case is the decision by the Cuomo Administration to jack up electricity rates by an estimated $7.6 billion.  You heard that right, $7.6 billion.

Under the Cuomo proposal, everyone has to pay.  It is being imposed by the government, so it is essentially a “tax.”  But since it was imposed by a state agency – in this case the Public Service Commission – the Legislature has no direct say.

And, despite it being a hike on everyone, the public has had little say in the decision.

What makes this different than a traditional tax is that the benefits are not going to the government, or to individuals in need, or to broadly enhance the public’s interest.  Instead, the money is being directed into the coffers of an Illinois-based company, Exelon, which is one of the most profitable companies in America.

Some have called this is the biggest transfer of wealth in New York State history.

While not part of the budget, the issue of the Administration’s bailout of aging, inefficient nuclear power plants located on Lake Ontario will have a huge financial impact on every resident, local government, non-profit group and business in the state, and divert funds from transitioning to clean, green renewable energy.

The impact will be real: if you’re a National Grid residential customer, $465 million will be added to electricity rates over the next twelve years.  For New York State Electric and Gas energy consumers, nearly $350 million.  For ConEd residential ratepayers (who already pay one of the highest rates in the nation) another $700 million will be tacked on.

And while many of us may be able to absorb the additional increases, many cannot.  There are roughly 6.5 million residential ratepayers, but more than 800,000 – or one in eight – are currently more than 60 days behind their due dates on their electric bill.

Hiking those rates even more will not help.

The Trump Administration and New York

Posted by NYPIRG on February 6, 2017 at 8:41 am
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The public focus on policymaking at the state Capitol has taken a backseat to the actions of the Trump Administration.  Almost from the minute the new President was inaugurated, his nonstop, frantic pace has captured the nation’s attention.

In his first sixteen days, President Trump has pledged to construct a wall between the United States and Mexico, imposed new sanctions on Iran, ordered that no refugees from seven mostly-Muslim nations could enter the US, made the preposterous statement that the crowd size of his inaugural was the largest seen, and has continued to claim that voter fraud allowed millions to vote – incredibly only for his opponent – even though there is not a shred of evidence that this is true.  Incredibly, the Trump Administration cites “alternative facts” as the basis for its claims.

In such a political environment, New Yorkers can be excused for not paying close attention to debates at the state Capitol.

When it comes to environmental policy, the Trump Administration had ignored well established scientific evidence that the burning of fossil fuels is a prime contributor to global warming.  The President has chosen the former head of ExxonMobil to be his Secretary of State and chosen individuals who ignore science as the heads of important environmental agencies, such as the EPA.

In addition, the President has also taken steps to overturn the Obama Administration’s limitations on coal mining and the construction of oil pipelines in the Midwest.

Here in New York, there has largely been a different approach: the governor has followed the advice of experts that the best place for fossil fuel is in the ground and banned the exploitation of natural gas through fracking, and he has advanced plans to encourage the use of alternative energy sources such as wind and solar.

Yet, the Cuomo Administration has approved permits for the construction of a 200 mile pipeline to deliver fossil fuels.  The Administration has done so quietly, flying under the radar of the Trump spectacle.

When it comes to ethics, the spotlight has remained on the President.  He simply refuses to completely disentangle himself from his business dealings and he still hasn’t released his tax returns – despite promises to do so.  In a decision which could lead to serious consequences for American consumers, the President issued an executive order that halted the implementation of another federal rule which mandated financial advisers act in the best interests of their clients.

On a more positive note, the President signed several executive orders — an ethics order banning administration appointees from ever lobbying foreign governments and from federal lobbying for five years after they leave office.

Here in New York, despite corruption scandals of historic proportions, there has been little movement to overhaul oversight to rely on independent agencies.  Instead, the governor has proposed the creation of a number of new watchdogs – but who are appointed by, and are accountable to, the governor.

It has been the lack of independent oversight that has contributed to Albany’s scandals.

It makes perfect sense for all Americans to pay close attention to the new Administration in Washington.  The new President enjoys the spotlight and has challenged the status quo with new approaches and, unfortunately, deceptions and deliberate falsehoods to hide his intentions and to mislead the public.

Yet, there is a necessary challenge to also focus on the actions of state government.  In a quote often attributed to Thomas Jefferson, “eternal vigilance is the price we pay for liberty.”

The work of holding elected officials accountable is the responsibility of all citizens.  Given New York’s recent scandals and the deliberate deceptions of the new Trump Administration, we will all have our hands full.

The consequences will be dire, if we neglect that responsibility.

The Governor Proposes Ethics Reforms As Part of His Budget

Posted by NYPIRG on January 30, 2017 at 8:47 am
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For the longest time, the state Capitol has been rocked by scandals.  In recent years, those scandals have mushroomed: Both leaders of the Legislature have been convicted of corruption and face time in prison, and close aides and associates of the governor have been charged.

Not surprisingly, each year Governor Cuomo has touted reforms that are supposed to address the ethical misconduct that has plagued Albany.  Unfortunately, the reforms that have been approved, while heralded as historic, have done little to curb corruption.  Typically the measures are weak; often riddled with loopholes, and in some cases appear deliberately designed to sound good, but fail.

In this year’s budget, the governor once again advances a package that he argues will deal with ethical problems in both state and local governments.  And while his rhetoric sounds good, a closer look reveals his plans are problematic.

Broadly speaking, the governor’s plans tackle four different areas: ethics, openness, campaign finance and voting rights.

The governor offers a number of measures that could help improve New York’s dismal voter participation record.  For decades, New York has ranked at or near the bottom of the nation’s barrel in this area.  Despite New York’s professed “progressivism,” when it comes to voting participation, the state is as bad as the nation gets.

Some of the blame lies with the state’s notoriously rigged political process, which leaves voters with little in the way of choices.  But that alone does not explain New York’s record.  New York has created significant obstacles to citizens registering to vote and does too little to support elections administration.

In the governor’s budget, he advances some “best practices,” most notably proposing that the state allow new voters the opportunity to register and vote on election day.  This is a common feature in many states with the highest voter participation rates.  It makes sense that as election day draws close, would-be voters are most likely to get engaged.  New York’s current voter registration deadline, for example, requires registration typically before Presidential debates occur – or right before voters fully engage.

The governor’s campaign financing proposals contain important reforms: a voluntary system of public financing, lower campaign contribution limits, and more disclosures about campaign contributors.  New to his package is a plan to ban campaign contributions from those who are seeking or receiving government contracts.

This last proposal is perhaps in reaction to the U.S. Attorney’s prosecution of a vast “pay-to-play” scheme, in which it is alleged top Cuomo Administration officials allegedly rigged government contracts to be steered to those who made campaign contributions to the governor’s reelection campaign.

The Cuomo Administration has been severely criticized for its across-the-board opacity.  In terms of openness, the governor is proposing changes to the state’s Freedom of Information Law (FOIL).  FOIL is the law that is supposed to allow the public access to government data – usually collected with taxpayers’ dollars.

However, the governor’s proposal does virtually nothing to enhance public access to the records of government agencies.  And government that operates in a secretive and publicly unaccountable manner sets itself up for scandal, among other problems.

And that’s what we’ve seen: scandals at the highest level have been alleged against members of the Administration.

Yet it is in the area of corruption-fighting ethics reforms that the Cuomo plans are most wanting.  The governor advances measures to require limits on the outside income of lawmakers, which is a good idea.  But the scandals alleged in the executive branch under the governor’s watch had nothing to do with caps on income.

Recognizing the need to address this area, the governor offers the creation of new watchdogs, but they are all accountable to the governor.  Instead, the governor should have proposed measures to strengthen the powers of existing watchdogs outside of his direct control.

In particular, when it comes to monitoring government spending, the state constitution establishes a separately-elected Comptroller to monitor the books.  Not someone appointed or accountable to the governor – who directs the state agencies – but someone who is supposed to be directly accountable to the public.  Over recent years, the governor and the Legislature have approved measures that  cut back the power of the Comptroller to monitor government contracts.   Instead they should be strengthening them.

When it comes to ethics, it’s long past time for New York to have a truly independent ethics watchdog.  Not a watchdog with appointees directly chosen by the governor and the legislative leaders.  Not one in which its top staffers are chosen from the staff of the governor.

An entity independent of the political elite that it is supposed to monitor.

Until New York establishes a system of independent ethics and contracting oversight, the nightmare of public corruption scandals will not end.  Hopefully, the final budget will make that happen.

New Yorkers Start to Get the Details on the Gov’s Free Tuition Plan

Posted by NYPIRG on January 23, 2017 at 8:29 am
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Earlier this month, Governor Cuomo held a news conference with the U.S. Senator from Vermont Bernie Sanders to announce a new initiative: to make public college tuition free for families whose incomes were up to $125,000.

At that time, the governor remarked: “A college education is not a luxury – it is an absolute necessity for any chance at economic mobility.”  He went on to say that “(College) is incredibly expensive.”  Senator Sanders was there, since it was his Presidential campaign that focused national attention on the cost of a college degree and the mounting debt that many students incurred to pay for a college education.

For many New Yorkers, the governor’s proposal was a welcome change.  After all, it was Governor Cuomo’s Administration that had changed New York law to automatically allow annual increases in public college tuition.  During his time as governor, the cost of attending the State University of New York has shot up by 30 percent over five years.

Making public college more affordable is a great idea, not only for educating the next generation of workers, but the next generation of citizens as well.

Last week, the details of the governor’s plan took shape.  The governor proposed a state budget that included funding for his “Excelsior scholarship” – the plan to eliminate tuition costs.  His plan tracks the one unveiled with Senator Sanders.  There appears to be one hitch: the Excelsior scholarship is a “deferred payment” program.  That means that the student receives the benefit of the scholarship after successfully completing 15 credits and earning at least a passing C grade.

The plan proposes that the public college defer billing the student for the tuition, and the college does not receive the scholarship money until after the semester.  If the student fails, the public college receives no income from the scholarship and must charge the student for the cost.

As a result, it is possible that the college’s and the student’s financial exposure may make the program less attractive.  Failing to perform puts the student squarely on the financial hook.  Of course, it is not unreasonable for the public to ask that students perform academically, but in life, stuff happens – parents divorce, deaths and illnesses occur; how will life’s unexpected problems and their impacts on students be addressed?

In addition to the Administration’s scholarship program, the governor’s overall higher education budget was not nearly as generous, and in some ways worse, for students than the status quo.

The governor proposed that operational funding for SUNY be kept at this year’s level.  Since the inflation rate is a bit over 2 percent, the governor is effectively proposing a cut of 2 percent in state funding for SUNY.

The governor also proposed cuts to programs that provide support to college students that come from educationally disadvantaged backgrounds.

And he proposed a tuition increase to those families making over $125,000.  You heard that correctly, the governor’s no tuition plan hikes SUNY tuition – for those whose incomes are greater than $125,000 annually.

Where will the additional revenues generated by the tuition hike go?  There is language in the governor’s budget that directs SUNY to spend new tuition revenue on hiring new faculty and student services.  But there are additional costs, such as the increases in cost due to inflation for example, that are not mandated.  As those costs increase and state supports stagnates, the increases in tuition will be used to fill those budget holes.

In his speech with Senator Sanders, the governor correctly identified a big problem, the skyrocketing cost of attending public college.  But a tuition-free plan is only one part of the necessary responses: the state needs to provide additional resources and it needs to strengthen programs to help the poor and educationally disadvantaged – students who already go to college tuition-free but often cannot afford the life expenses needed to attend college and complete their degree.

Making a big policy splash helps, but the policy details matter more.  The governor’s proposal is only the first step in New York’s several month budgetary dance.  Here’s hoping that the final budget not only lowers tuition, but provides the resources necessary for SUNY to fulfill its educational mission to all students.

The Governor Unveils His 2017 Priorities

Posted by NYPIRG on January 16, 2017 at 2:14 pm
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Last week, Governor Cuomo took to the road to unveil his State of the State addresses.  The State of the State is a constitutional requirement that the governor report to the legislature on issues of concerns and to offer his recommendations.  For nearly 100 years, the State of the State address was delivered in a written and verbal format in the State Capitol complex.

In a huge change, the governor did something that hadn’t been done before by ignoring the historical location of the State of the State and instead made speeches at six different locations – New York City, Buffalo, Long Island, Westchester, Syracuse and at the University of Albany.  At each location, the governor invoked consistent themes, but also different proposals that would appeal locally as well.

State of the State addresses, like the State of the Union address in Washington, allows the chief executive to set the stage for his or her policy agenda and to shape the public narrative surrounding the performance of his or her tenure.  In that way, despite being delivered at six different locations, the 2017 State of the State addresses were similar to those of years past.

In his addresses, the governor unveiled his policy initiatives for the 2017 legislative session.  He hoped, I’m sure, that his proposals would garner the broadest public support as a result of his “road show” approach.  Here are some of the key proposals offered by the governor:

  • He proposed that tuition be free for students attending the State University of New York if the student or the student’s family makes less than $125,000 annually. According to the governor, one million New York families will be eligible.
  • He announced a deal to close the Indian Point nuclear power plant by 2021.
  • He committed that by the year 2030, the state will generate 50 percent of its power from renewable energy sources, like solar and wind.
  • He proposed to spend $2 billion dollars on water quality and $300 million for environmental programs.
  • He even proposed a package of ethics and campaign finance reforms that included a voluntary campaign finance system that allowed for public financing, “pay to play” campaign restrictions on those receiving government contracts, and limits on lawmakers’ outside income.

These proposals, which sound great, are just rhetoric at the moment.  The governor will have to propose specific legislation the make these ideas a possible reality.  Once New Yorkers see the details, they will know which plans are worth supporting.  In addition, whether the governor chooses to spend time campaigning for his proposals will offer the best insight into whether he is serious about getting his proposals accomplished.

Often New York elected officials will expend a lot of energy offering lip service to solutions to problems without doing the hard work to get them enacted into law.

Last year, the governor fought hard to pass an increase in the minimum wage.  The governor not only advanced a proposal, he barnstormed across the state, meeting with New Yorkers and pitching his plan.

His plan to overhaul the state’s ethics laws is an opposite example. Despite the charges filed against two of his top aides and associates, and after the convictions of the top two legislative leaders on corruption charges, the governor did nothing to galvanize public support for his ethics plans.

Instead, he waited until a few weeks before the end of the legislative session to begin discussing his proposals and chose to negotiate secretly.  Once his plans were rejected, the governor threw up his hands and blamed inaction on the legislature.

And while the legislature does deserve criticism, the governor deserved criticism for his failure to use his immense institutional powers to move public opinion and change it into public action.

So, New Yorkers will soon know the actual details of the governor’s plans and will soon see which ones he really cares about.

Given the incredible, and sweeping scale, of corruption in the state, New Yorkers must hope that the governor makes his mark in changing the political culture of Albany, a culture described by U.S. Attorney Preet Bharara as a “cauldron of corruption.”  The scandals that have engulfed Albany have come during the governor’s tenure.  He must make cleaning up New York more than a rhetorical priority, it must be a real one.

The governor’s actions will speak louder than his words.