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Blair Horner's Capitol Perspective

Musk, Trump, and the Nation’s Finances

Posted by NYPIRG on June 9, 2025 at 8:58 am

While Albany continued to slog along toward the end of the legislative session, a perhaps not surprising twist in Washington overshadowed much of New York’s politics: the public breakup between billionaire Elon Musk and President Donald Trump. The first public evidence of the developing rift was Mr. Musk’s critique of the President’s “Big, Beautiful Bill” that was approved by the House of Representatives and is under consideration by the U.S. Senate.

The “Big Beautiful Bill” is an attempt by the President to get his top-line fiscal policies approved by the Congress. The 1,000+ page bill would:

  • Extend and increase the nation’s debt limit, allowing it to borrow more to pay its bills;
  • Cut billions of dollars from federal programs, such as the Supplemental Nutrition Assistance Program (SNAP) and Medicaid, programs that provide food and health care to low income Americans; and
  • Extend trillions of dollars in tax cuts, primarily benefiting the well off.

According to the Congressional Budget Office – the office that offers an independent analysis of fiscal matters before the Congress – the President’s plan would increase the nation’s debts by $2.4 trillion over the next decade.

This increase in the nation’s debts would represent roughly 150% of the United States’ gross domestic product – the total market value of the goods and services produced within the United States in a year.

To put that in some context, after World War II, the U.S. debt to GDP percentage was a bit over 100%. The President’s plan – as approved by the House – would push the nation into unknown fiscal debt territory.

When Mr. Musk served in the Trump Administration as its de facto leader of the “Department of Government Efficiency (DOGE), part of its mission was to make government more efficient. In one press event in the Oval Office, Mr. Musk said, “If we don’t do something about this deficit, the country’s going bankrupt….And it’s essential for America to have the resources necessary to provide things to its citizens and not simply be servicing vast amounts of debt.”

Musk’s concerns about the nation’s finances were echoed by members of Congress, for example one New York Representative stated, “Our national debt is now over $35 trillion. As a father, it pains me to see the debt we are saddling on our children and grandchildren.” Indeed, opposition to the President’s plan is, at least to some extent, driven by the legislation’s failure to reduce the nation’s debt.

Proponents have argued that the tax cuts will stimulate economic activity and that will help the nation grow its way out of its fiscal plight. While it’s likely that the tax cuts will stimulate the economy, it won’t offset the massive losses in revenue.

There is simply no way to reduce spending in any significant way without savaging politically popular programs. Indeed, some of the opposition in the Senate is due to the House budget’s planned cuts to Medicaid, which if enacted would eliminate health insurance for millions of Americans.

After World War II, the nation embarked on a strategy to eliminate its massive war debt. An important component of that was to run federal budget surpluses for many of the years following the war. By the mid-1970s, the nation had reduced its debt to GDP ratio to about 25%.

One important component of running those surpluses was to raise taxes – particularly on the wealthy. After the war’s end, the highest tax bracket was raised to 91 percent at its peak.

Starting in the mid-1960s that began to change, with a steady reduction in the highest tax rates from 70 percent in 1965 to just under 40 percent today. Those reductions happen to correspond to the nation’s growing debt-to-GDP.

Part of the defense of slashing federal spending is the desire to reduce the mounting and unsustainable national debts. But the President’s plan, at least as drafted by the House, forces those who rely on federal programs to feel the pain while allowing the well-to-do to escape any of the pain – in fact the wealthy will further benefit.

How does that make sense? All Americans have a stake in the future of the nation – as was the case after fighting and winning World War II.

This time a combination of a global pandemic, a financial meltdown, and tax policies that have reduced the financial burden of the wealthiest Americans, have driven the nation’s debts to the worst that it has been in nearly a century.

And the plan before the Congress is to make it worse.

We all live in the same nation. We will all sink or swim based on the nation’s decisions. Tax cuts will do nothing meaningful to help the nation’s financial crisis. New Yorkers should look to their Representatives to protect the nation’s financial future, not worsen it while eviscerating the U.S. safety net that protects the most vulnerable among us.

As the 2025 Legislative Session Nears the Finish Line, Environmental Issues Move to the Fore

Posted by NYPIRG on June 2, 2025 at 8:33 am

As the clock ticks down toward the end of the 2025 legislative session, environmental issues have moved to the forefront. Last week, the state Senate approved a new Commissioner for the Department of Environmental Conservation. The DEC is a sprawling agency that plays a leading role in a range of issues from permits for hunting and fishing, to overseeing state water quality, climate change, and the state’s mounting trash disposal problem.

The approval of a new DEC Commissioner came at the same time as top environmental issues were emerging during the session.

One of the top issues that has been the subject of keen attention is the NY Home Energy Affordable Transition (HEAT) Act. This legislation aligns utilities’ policies on providing power to residential consumers with the state’s climate mandates.

New York’s current laws promote gas system expansion by mandating a gas utility’s obligation to provide gas service to any new customer upon request while requiring that existing customers subsidize their new service connections within 100 feet of a main gas line. That subsidy – estimated to be $200 million annually – would be eliminated by the legislation. The bill also protects ratepayers from the necessary transition costs in moving to a “greener” power supply by capping home energy bills for all customers at 6% of income. 

It has been reported that negotiations between the state Senate and Assembly on the bill have been ramping up and may be moving toward agreement over the next few weeks of the session.

Another top issue facing the state is what to do about its mounting trash disposal crisis. According to the DEC, Americans now generate twice as much waste as they did 50 years ago. What to do with the trash that we all produce? Right now, the number one place that residential trash goes to is a landfill; number two is export for disposal; number three is burning; and the last is to be recycled. There is no evidence that the problem is getting better. In fact, the state’s residential recycling rate has been dropping over the past decade.

The state’s capacity to tackle this problem is dwindling. Again according to the DEC, “New York’s 25 municipal solid waste landfills have a combined landfill capacity of between 16 and 25 years.”

If the state’s landfills are filled to capacity in a decade or so, what will happen? At the end of 2023, the DEC issued its “New York State Solid Waste Management Plan” to tackle that emerging problem. Among its recommendations, the DEC highlighted the need for a “producer responsibility” approach and urged action to, among other things, expand the state’s bottle deposit law and reduce packaging wastes.

Those two legislative proposals are actively under consideration in Albany.

The Packaging Reduction and Recycling Infrastructure Act (PRRIA) legislation will reduce plastic packaging to dramatically reduce waste, as well as phase out some of the most toxic chemicals used in packaging; improve recyclability of packaging; and slash greenhouse gas emissions associated with plastic. It will also make polluters pony up by establishing a modest fee on packaging paid by packaging producers, generating new revenue to help defray waste costs for local taxpayers.

Last week, that legislation was approved by the state Senate and advocates are slugging it out as the bill moves through the Assembly.

The packaging bill does not cover beverage containers that fall under the state’s Bottle Deposit Law. That’s the law that requires a nickel deposit on certain carbonated beverages and bottled water. When you return the container, you get your nickel back. The DEC describes the Law as a “tremendous success.” When the law kicked in 42 years ago in 1983, carbonated beverage containers were found everywhere; now the overwhelming majority of these containers are redeemed under the program. But many beverages – most notably non-carbonated sports drinks – didn’t exist four decades ago and are not covered by the law today.

Legislation to modernize that law was reported out of the state Assembly’s Environmental Conservation Committee last week and may be considered as part of any overall agreement on reducing packaging wastes.

The new DEC Commissioner has a golden opportunity to weigh in on these and other important issues. Many of the top issues at the end of the session fail in the final stretch as time runs out. The ones that are approved get a last-minute push from important advocates. The 2025 session is an opportunity for the Hochul Administration – and its new DEC chief – to weigh in and move lawmakers toward approval of these important bills.

But the legislative clock continues to tick toward its midnight. Now is the time to act.

One Budget Failure

Posted by NYPIRG on May 19, 2025 at 6:19 am

It is often said that budgets are about priorities: There are unlimited demands but only limited available resources. What you fund is what you think is most important.

When it comes to those things you choose not to fund, it must be that budget makers are less interested in them.

In New York’s recently approved budget one of the most notable areas that did not receive adequate assistance was the state’s independent colleges.

Historically, two of the biggest programs that provided support for independent (a.k.a. private) colleges was the state’s Tuition Assistance Program (TAP) and Unrestricted Aid to Independent Colleges and Universities (known as “Bundy Aid”).

For decades, New York offered the neediest public college students assistance that covered full tuition through TAP at the State University of New York and the City University of New York. The program also offered an equal amount of assistance to students attending independent colleges.

However, starting in 2011, New York began to change TAP. During that year the maximum TAP award for the neediest college students was “frozen” as the state commenced raising public college tuition. The plan called on the public colleges to use their own resources to cover the difference between the maximum TAP award and the cost of public college tuition. However, in recent years the state has stepped in and covered the difference between TAP awards and public college tuition.

Students attending independent colleges and universities also are eligible for TAP and awards to those students were “frozen” too. Since TAP awards were frozen, those campuses also had to figure out ways to cover the financial assistance that would normally have come from the state’s TAP. But when it came to private colleges, the state never stepped in to change the situation.

Adding to that financial hit, New York State was cutting back its direct support of colleges in the independent sector as well.

Bundy Aid directs financial support to independent colleges. The program was established in 1968 with the goal of providing an answer to the question “how the State can help preserve the strength and vitality of our private and independent institutions of higher education and at the same time, keep them free.” In response, the state decided that “the moderate but real level of need calls for direct assistance from New York to private colleges and universities.”

Once a vital component of independent colleges’ finances, the program has been decimated by cuts over the past four decades. The peak state support occurred during the 1989-90 fiscal year, when nearly $114 million was appropriated. During the current fiscal year, that amount has been reduced to under $20 million. If New York had merely kept pace with inflation, the amount of Bundy Aid would be around $260 million – not less than $20 million.

During the budget battles this year, there was an effort to both increase the maximum TAP award to fully cover tuition in public colleges and to begin to restore funding to Bundy Aid.

Both failed. The final budget agreement kept the maximum TAP award at $5,665, well below tuition at the State University of New York ($7,070) and kept Bundy Aid below $20 million.

Obviously, state support of independent colleges has not been a budgetary priority.

The result? Not surprisingly, many colleges – usually small ones – have seen their finances become damaged or worse. According to New York education officials, over the last 18 years, New York has lost seventeen independent colleges, universities, and other degree-granting institutions. Ten of those seventeen shut their doors in only the last two years, throwing their students into educational uncertainty and potentially, entire communities into economic insecurity.

One recent example was the closure of the College of St. Rose in Albany, N.Y.

Last week, another financial warning was posted on a local independent college. Union College in Schenectady has fallen short in filling its freshman class for two years and is now pulling millions of dollars from its endowment to balance its budget. While there was no evidence of panic, it is an indication of a struggling sector. In a recent financial ranking of New York’s independent colleges, Union College had a positive grade, but well over a dozen more were listed as in financial trouble.

Why should we care?

The answer is that colleges not only educate the adult leaders of the future, but they are also dynamic “economic engines.” These economic engines create jobs that stimulate and anchor local economies. Independent colleges and universities in New York State contributed an estimated $97 billion to the state’s economy and supported more than 400,000 jobs. These institutions also provide cultural and educational resources to the larger community, contributing to the quality of life in the area.

We now know that New York’s elected leadership doesn’t consider the independent sector of higher education an important component of the budget. As independent campuses close and others struggle, New York’s decisions are costing jobs and economic activity. Here’s hoping next year’s budget reverses this not-so-benign neglect.

New York Has a Budget

Posted by NYPIRG on May 12, 2025 at 7:54 am

After weeks of debate, Governor Hochul and state lawmakers hammered out a budget deal – a full 38 days late, the latest agreement in 15 years. Despite the lateness, the governor has been barnstorming across the state touting her policy victories. The four most notable — changes to the evidence discovery process before criminal trials, changes that make it easier to confine individuals with suspected mental illness for psychiatric evaluation, additional penalties for wearing masks while committing crimes, and banning student cellphones in the classroom — had been the primary reasons for the budget delay.

The actual budget was more or less the same as the one that the governor advanced in January. The final budget was a bit more than the governor proposed – $254 billion or $2 billion more – but was a full 5 percent more than last year’s.

Given the immense size of the budget, it contains a lot of spending that is notable. As a result of how the governor conducts budget negotiations, there are a lot of “non-budget” policy changes included as well.

In terms of spending, the state’s new budget tackles a wide range of issues. New Yorkers will receive “inflation refund” checks projected to cost the state $2 billion — up to $200 for individuals, $400 for families — for middle-class New Yorkers.

The state will spend billions to pay off its Covid-era unemployment benefits debt owed to the federal government and increase unemployment benefits for the first time in six years.

In the area of higher education, the governor’s proposed “New York Opportunity Promise Scholarship,” was approved. That plan allows community college students aged 25 to 55 who do not have a college degree to attend community college for free if they enroll in certain programs within high-demand fields, such as technology, cybersecurity, nursing, and teaching.

The Legislature restored Governor Hochul’s proposed cuts to college opportunity programs, which provide assistance to educationally and economically disadvantaged students.

In the area of the environment, the final budget invested $1 billion in climate programs. That amount – while significant – was far less than the “cap and invest” program would have generated had it been allowed to proceed.

The state’s Environmental Protection Fund got a boost to $425 million this year, a $25 million increase. The budget continued the existing spending level of water infrastructure at $500 million.

The electric bus mandate was pushed back two years in the budget agreement, giving school districts more time to transition from fossil-fuel-powered vehicles.

The New York City mass transit system received revenues from the new budget. It included a payroll mobility tax hike on city companies with yearly payrolls of $10 million. New York City suburban areas businesses with big payrolls will see their rates go up too. The hikes — which will help pay for the $68 billion plan to modernize the MTA’s decaying trains, stations and infrastructure — follow the outlines revealed in a deal between the governor and state legislative leaders.

A myriad of other “non-budget” issues were loaded into the final budget agreement, many negotiated in secret. From making changes to how the state regulates religious schools’ compliance with education requirements to changes to the state’s public financing system, the budget was chock full of new measures.

The budget also delayed the state law that restricts the outside income of state legislators, allowing them to continue to “moonlight.” The budget included a change in how lieutenant governors are elected: From now on, there will be no primaries for that position; lieutenant gubernatorial candidates will run as one ticket with the political party’s candidate for governor as is done for president.

The budget gives the governor broad authority to make midyear budget cuts in order to respond to potential fiscal shortfalls resulting from federal budgetary changes that may result from actions by the President and the Congress. Similar powers were granted to then-Governor Cuomo during the Covid emergency, but the new language has some more rules in place. 

And the budget also includes a $10 million fund to pay the legal fees of state officials who are investigated by the Trump administration. Those covered include state workers who are implicated in a federal proceeding as a result of their job duties. In addition, it also applies to cases where a federal proceeding is “unrelated to the employee’s state employment or duties but is reasonably likely to have been commenced because of or in response to the employee’s state employment or exercise of their duties.”

The budget spends a lot and changes a lot of laws. Whether this budget will hold up to the realities of the upcoming year and was worth the waiting, only time will tell.

New York’s Latest Budget in Fifteen Years

Posted by NYPIRG on May 5, 2025 at 8:10 am

April showers bring May flowers, but so far New York State’s budget – due by April 1st – is still not done. Despite an announcement last week by Governor Hochul that there was a budget agreement, things are not wrapped up and the hope is that a final budget will be put to bed this week.

Time will tell. No matter what though, it will be the latest budget agreement in 15 years.

What’s the reason for the late budget? Responsibility can be laid almost entirely at the feet of the governor. It was she that demanded agreements on four policy issues – which are not fundamentally budget items – that she thought were important. In addition, she advanced some of those measures late in March, almost guaranteeing that the budget would be late. It is a tactic that she has used in her previous budget negotiations.

Those four measures were the agreements that the governor was referring to last week. Apparently, she got what she wanted in her plans to change the discovery process before criminal trials, new changes that make it easier for police to confine a person for psychiatric evaluation if they suspect mentally illness, additional penalties for wearing masks while committing crimes, and banning student cellphones in the classroom.

According to the governor, she also got agreements on policies that are directly related to the budget: one-time tax rebate checks of $400 for families and $200 for single filers. The governor also announced that the final budget also will reduce the tax rate for middle-income and upper-middle-income families and increase the child tax credit to $1,000 per child under 4 years old, among items that were part of her “affordability agenda.”

Without the actual legislation to review, of course, there is no way of knowing what the details are for both the governor’s announced agreements and the myriad of other measures that will be part of a final spending plan of $254 billion.

In a budget that big, there are lots of other issues that have not been part of the public debate. These include critical measures that impact the state’s future – for example, how to make college more affordable and how to improve public participation in government.

In her original budget plan, Governor Hochul proposed cuts to the state’s successful college “opportunity programs,” at odds with her focus on affordability.

Opportunity programs, which are designed for educationally and economically disadvantaged students, have a steady track record of success in increasing retention and graduation rates among the most at-risk students – both in public colleges and in independent ones. These programs take a comprehensive approach to college access and affordability by building in academic counseling, mentoring, and often providing waivers for related costs such as transit, textbooks, and childcare.

SUNY senior college educational opportunity program students, for example, are more likely than the general student body to stay in college in their first year. The six-year graduation rate for those students is higher as well. Similar results exist for opportunity programs found in the independent sector. The same is true with the City University system. Will funding to those programs be restored?

Also, will the state enhance support for independent colleges? Last year, the budget cut state support for these important institutions. This year, the state Senate has restored that cut. What will the final budget agreement do?

Another underreported item is the collapse of local news reporting. The accelerating loss of local newspapers and other media outlets has had a devastating impact on civic life. Current projections show that the United States will have lost one-third of the newspapers that it had back in 2005.  And many of those that are surviving barely cling to life.

In our representative democracy, an informed electorate is fundamentally important to ensure that the system works.  Many Americans have unprecedented access to information, but with lives busier than ever, it’s very hard for citizens to fill the reporting and analysis void provided by local reporting.

Last year, New York included in its budget a tax credit to benefit local news outlets. That measure did not help local non-profit newsrooms – such a public radio stations. There are proposals to both include non-profits in that tax benefit as well as increase direct financial assistance. Given the importance of the press in our democracy – and the growing hostility to it nationally – will the final budget take steps to help secure their financial futures?

It’s possible that New Yorkers will know how these topics, and a long list of others, are addressed in the final budget agreement. But for future budgets, New Yorkers should make sure that lawmakers know that getting their work done on-time – like meeting the state’s legal deadline of April 1st – is important and we expect them to do it.