Blair Horner's Capitol Perspective

Lawmakers Return to Albany, and Whistle Past the Fiscal Graveyard

Posted by NYPIRG on June 1, 2020 at 9:37 am

After a nearly two-month hiatus, state lawmakers returned to Albany last week to conduct legislative business.  Having wrapped up a limited agenda, they are not expected to return for the remainder of the scheduled session.

The focus was on thirty bills that were more or less connected to issues that emerged from the COVID-19 pandemic.  The bills ranged from new protections for renters and pandemic plans for nursing homes.  Three other bills addressed a wide range of issues:

The first one addressed the issue of how to protect residential utility consumers from possible utility shut offs.  During the COVID-19 pandemic, many New Yorkers have either lost their jobs or seen a tremendous loss of income.  As a result, many are struggling to pay bills for services generally understood as essential to living.  The approved legislation ensures services like water, phone, electricity, and other utilities are not cut off due to non-payment during the COVID-19 pandemic or similar states of emergency.

While some utilities have committed to ceasing water shutoffs during the pandemic, many have not, and all have been voluntary.  Approximately 18 million New Yorkers may not be protected by a moratorium on water shut offs, for example, unless the bill is approved.

The second legislation addressed getting an absentee ballot.  Recently, Governor Cuomo issued an Executive Order for the upcoming June primary that allows any voter to request an absentee ballot and mail it in.  The governor’s order relied on voters to request an absentee ballot, though.  Voters can obtain an absentee ballot application online from the state Board of Elections.

This legislation built on the governor’s action by making permanent the opportunity to request an absentee ballot online and to submit it in time for the state’s elections.  If approved by the governor, it would make it easier to vote in the November 2020 general election and beyond.

The third bill to pass both houses boosted protections from price gouging.  In times of disaster, epidemic or other shortages, some businesses see opportunity to boost their prices to maximize profits by gouging consumers and businesses when they’re at their most vulnerable.  The legislation will give the Attorney General an important tool to deter – and if necessary punish – businesses from exploiting public emergencies to profiteer by price gouging New Yorkers.

While these bills – and others – help deal with issues emerging from or highlighted by the coronavirus pandemic, the Legislature ignored the very large elephant in the room: the meltdown of the state’s finances.

Governor Cuomo has stated that New York faces a $60 billion budget shortfall over the next four years.  Lawmakers did nothing in response.  The reason?  The governor and state lawmakers want to wait to see what kind of federal bailout emerges from Congress.  The House of Representatives recently approved a $3 trillion package that will go a long way toward helping all of the states manage their fiscal stresses, at least for the upcoming year.  But in Washington both the Senate leadership and the President were cool to the legislation.

However, it seems likely that some stimulus package will emerge this month, and so New York’s political leadership wants to wait before acting on budget matters.  Whatever emerges, though, it is unlikely that the Congressional action will fully fill the state’s budget holes.

Last week a coalition of 60 national, state and community organizations, labor unions, and faith leaders urged Governor Cuomo and state lawmakers to retain New York’s stock transfer tax revenues to help offset the four-year budget deficit. 

The groups included national organizations such as Public Citizen and consumer advocate Ralph Nader, New York civic organizations such as the Community Service Society, the Fiscal Policy Institute, NYPIRG, advocacy groups such as Brooklyn Center for Independence of the Disabled and the Strong Economy for All Coalition, labor unions such as District Council 37 and United University Professions.

Since 1905, New York State has had a stock transfer tax, which acts much like a sales tax on the buying and selling of equities.  Since the early 1980s, the tax has been refunded to investors.  The amount of tax dollars rebated back to Wall Street ranges from roughly $5 billion to $16 billion annually.

New York began the year with a $6 billion budget shortfall and little was done in the state’s budget agreement to eliminate it.  The COVID-19 pandemic, plunging sales taxes and the resulting unemployment have greatly weakened revenues even further.  Governor Cuomo is contemplating massive cuts to vital programs, which he would be forced to enact unless revenues are raised.  

At some point soon, Albany will be faced with the daunting prospect of savaging important public programs or raising the money to offset the state’s financial deficit.  Last week the governor and the Legislature punted those decisions to another day.

Will the US Postal Service Survive the Trump Administration?

Posted by NYPIRG on May 18, 2020 at 10:22 am

The words “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds” have long been associated with U.S. Postal Service’s workers.  The Postal Service has its historical roots in the 1775 Second Continental Congress and its first postmaster general was Benjamin Franklin.  It is one of the few government agencies explicitly referred to in the U.S. Constitution.

Why was the post service so important?  It was, and is, the way the public communicated.  It was, and is, an important tool for commerce.  And it had to work and work well consistently, like the motto says.

In addition to delivering the mail, for years the Post Office also acted as a small bank.  From 1911 to 1967, the Postal Service also operated the United States Postal Savings System, not unlike a savings and loan association with the amount of the deposit limited.  For many Americans who lacked access to a bank, it was a way to cash checks.

Since the 1980s, there has been an ongoing effort to privatize the Postal Service and those efforts have resulted with an agency often in debt, despite its important duties.

And so, despite the Postal Service’s record of delivering the mail despite while contending with Mother Nature, World Wars, a Great Depression and now a pandemic, the system is teetering on the brink because of the efforts of the President and his allies to eliminate this vital service.

The Postal Service warned Congress recently that it will completely “run out of cash” in the next several months without immediate action from the White House and Congress.  Despite as many as 630,000 jobs at risk, President Trump and allied lawmakers have refused to commit to rescuing the government institution as it falters amid the coronavirus pandemic.

The President has thus far rejected the Postal Service’s requests.  During a press briefing recently, the President urged the Postal Service to simply “raise the prices by, actually a lot.”

According to the Washington Post, “Trump threatened to veto the $2.2 trillion [stimulus] Coronavirus Aid, Relief, and Economic Security, or CARES, Act if the legislation contained any money directed to bail out the postal agency.”

The New York Times also reported that a bailout for the Postal Service “emerged as a political sticking point” in talks over another large coronavirus stimulus package, “with Democrats pressing to deliver one and President Trump, a persistent critic of the agency, opposed.”

House Democrats pushed for a $25 billion cash infusion for the Postal Service as part of the last stimulus package, but Senate negotiators ultimately opted to include only a $10 billion line of credit.  Postal management has said that amount would be insufficient for preventing fiscal calamity this year.

That $10 billion loan is now being used by the President as a way to leverage changes to dramatically alter the way the system operates or possibly force it into bankruptcy.

Why keep the Postal Service?  Many of us are now working from home, postal workers are the ones who bring many of our packages to our front doors.  And in rural and hard-to-reach areas, postal workers are the only ones who provide regular delivery service because there’s not enough money in it for private courier businesses.  Postal delivery is the only way many Americans can get their essential medications or pension checks — and in some states, ballots to cast their votes.

It may be that last service that explains why the Trump Administration is so forcefully attacking the Postal Service.  The President has said that allowing voters to cast their ballots through the mail makes it harder for Republicans to get elected – even though it is a far safer way to vote during a pandemic.  There’s nothing inherently partisan about voting by the mail, but apparently the President sees a threat in making it easier to vote for American citizens who are anxious about going to a polling site.

Irrespective of that highly suspect political concern, the Congress must do exactly what should be done for the nation’s most essential services in times of emergency.  It should properly fund the Postal Service to support it in normal times and to ensure it’s ready for extraordinary times like now.

The Legislature May Be Starting Up

Posted by NYPIRG on May 11, 2020 at 10:33 am

In March, the Legislature granted Governor Cuomo unprecedented power to make laws.  No New York Legislature had ever granted its executive the power to change and make new laws without legislative consent. 

The reason was that the state faced a unique, looming health catastrophe resulting from the COVID-19 pandemic.  All knew that the state had to respond and had to do so quickly in order to react to this unprecedented threat. 

Then, as part of the budget agreement at the end of March, the Legislature granted the governor additional powers, to unilaterally make cuts in the approved budget, again without legislative consent.  The logic behind bestowing that much power on the governor is that executives control the machinery of government that implements the laws and is capable of acting quickly, whereas legislatures are deliberative bodies tasked with making broad policy, not making the trains run on time.

In both circumstances, the Legislature reserved the power to change the executive’s decisions, but only after the fact. 

The budget was passed in early April and then the Legislature vanished.  Despite being scheduled to return to Albany on April 20th, little had been heard of their plans, until last week.

Last week, the Legislative leaders announced that they would hold two joint hearings to review some of the impacts of the pandemic on New Yorkers.  One hearing will evaluate the economic impact of the COVID-19 pandemic on small businesses, including farms, across the state, and whether the federal response has been sufficient.  A second separate hearing is described as examining the disproportionate adverse impacts of COVID-19 on minority communities, which may include disparate impacts on industries, services and the surrounding health care system.

Both, of course, are hearings that need to happen and both review important topics.  But there are other topics that should be examined as well.

For example, as mentioned, the Legislature has granted the governor vast new powers to handle the crisis.  Lawmakers should review how those new powers have been used and whether they need to be continued without change, or modified.

Another topic would be to examine the performance of the state in reacting to the pandemic.  This review should not be about grading the performance of the governor, but more about what can be learned.  Given the speed of the growth of the contagion in New York, many decisions had to be made without complete information – or sufficient time to consider strategies.

The governor has received widespread accolades for his public communications of the magnitude of the crisis, the problems New York faced, and his strategies for responding.  The centralization of authority granted the governor enormous power to reorganize health care delivery and the purchasing of necessary medical equipment.

Unfortunately, it didn’t all go without a hitch.  Decisions on how nursing homes handled vulnerable and sick residents and the awarding of government contracts to unreliable bidders who had no, or little, demonstrated experience have all become topics of media reports.  Lawmakers should look into those – and any other – topics to see what lessons can be learned.

In addition, what should the state do to better prepare itself for future outbreaks or even a possible “second wave” of the coronavirus?  Some things to consider include:

  • Is state funding adequate for water infrastructure?  Has the state prohibited shut-offs of water access?  Washing hands is an important way for individuals to reduce risk from the virus.
  • Is the Attorney General sufficiently empowered to go after those who engage in price gouging?
  • Are voters given adequate access to mail-in absentee ballots, if they wish to protect their own health and reduce the risk to poll workers by voting by mail?
  • And, given that essential workers are most at-risk of the coronavirus itself, and facing reduced vital services if the governor’s budget cuts are enacted, is the state demanding that those with the most resources – and least likely to face the disease itself – contribute more to the state budget to offset those possible cuts?

These reviews should not be a game of “gotcha.”  Unless evidence surfaces of inappropriate actions, lawmakers must assume that the Administration was reacting under incredible pressures as best at it could to handle an unprecedented crisis.  But the legislative branch of government was created as a co-equal partner to the executive and a watchdog over the executive’s day-to-day actions.  Simply handing over power and not holding the executive to account shirks responsibility and erodes the public’s trust. 

The governor has rightly noted that we must use the pandemic to learn and grow.  Much can be learned and it’s the Legislature’s job to identify what went right and what did not. 

It Looks Like Big Cuts to the State Budget, but Who Should Pay?

Posted by NYPIRG on May 4, 2020 at 1:35 pm

As the nation struggles to deal with the COVID pandemic, it’s clear that “essential workers” are carrying the load on behalf of the rest of us.  Our health care workers and first responders often have to deal with incredibly sick and contagious people; others considered “essential” have to continue to go to work to keep our transit systems running, lights on and grocery store shelves stocked, even if it means potential life-threatening exposure.  Many of us continue to work, but from the relative safety of our residences.

The vast majority of these “essential workers” are not wealthy and often rely on government services to get along, most notably relying on kindergarten through high school education to provide a safe space for their children. 

New York State policymakers have been grappling with the economic fallout of the pandemic and the state and local governments’ growing structural fiscal deficits.  As part of the state budget agreement last month, Governor Cuomo and the Legislature agreed to grant the governor vast authority to make cuts to the agreed-to budget if revenues cratered, which they have.  Recently, the governor’s office released a blueprint for the cuts that are being contemplated — and if implemented will go into effect soon.

Albany had been hoping for a bailout from the federal government to offset — or eliminate — the current fiscal year deficit estimated to run between $10 and $15 billion.  So far, no bailout.

The governor’s office may very soon make decisions to cut programs and the programs likely to face the biggest cuts come in the area of education — precisely one of the services that “essential workers” rely on most for their school-aged children.

The governor’s financial plan proposes a 10 percent cut in state agencies budgets, and over $8 billion in cuts to programs including K-12 education, college aid, transportation and health care.

At a time when the burdens and risks of the pandemic are not being shared equally, why should those currently bearing the biggest load of keeping society together take the biggest budgetary hit?  They shouldn’t.

Instead those who have been least affected, those with the most means, should pony up even if it means that they contribute more than their share of the costs of closing budget deficits.

One obvious measure to consider is for the state to start collecting the “stock transfer tax.”  Originally enacted over 100 years ago, New York has a tax on the books that assesses a tiny fee for each stock transaction.  What amounts to pennies on the dollar for each Wall Street stock transfer has the potential to amount to billions of dollars in revenue for New York State.

Starting in the 1980s, the state started rebating that tax back to Wall Street.  It still collected the tax, but gave it immediately back to investors.  You heard that right:  The tax collected on stock purchases and sales is collected by the state and then given back.

For most investors, this is an unseen tax — even if it was collected.  Most people who have investments generally are not buying and selling stocks with great frequency.  Wall Street speculators, on the other hard, seek to jump in and out of investments at a rapid pace and those would be the people who would pay the tax.  Largely very wealthy investors.

Given the gravity of the state’s budgetary situation, why doesn’t the state “turn on” the tax?  There is fear that Wall Street — an economic engine of New York — might pull up its Manhattan operations and move elsewhere.   

But would they?

There are other places with sophisticated stock markets that already have a stock transfer tax.  Places like London and Singapore, to name two.

There doesn’t seem to be any evidence that those markets have been harmed, although there is some information that may mean that their high frequency stock market “speculation” trading slows, which is probably a good thing.

As Governor Cuomo and the legislative leaders look to address financial shortfalls, they should remember that there is a tax that is ready to go.  A tax that asks for a contribution from those who benefit most in society and are affected least by the state’s financial shortfalls and health threats.  It’s time to “turn on” the stock transfer tax.

Earth Week 2020

Posted by NYPIRG on April 27, 2020 at 10:58 am

Last Wednesday was the 50th anniversary of Earth Day.  For five decades, the world has marked Earth Day as a time to reflect on the state of the environment and to debate how best to improve the only habitat we have.

Marking the half-Century anniversary, this year’s Earth Day occurred during the coronavirus pandemic.  The world’s attention has been focused on the terrible impact that COVID-19 has had – and is continuing to have – on the world’s population and economy.

But some were taking steps on the environment – unfortunately, the steps taken were backward.  The Trump Administration has used its time in office to do all it can to erase whatever advances have been made to curb environmental degradation and, in particular, to slow the rate of global warming.

In recent weeks, while the nation was transfixed by the pandemic, the Trump Administration’s anti-environment actions picked up steam:

  • the Administration announced weaker emission standards for cars.  The Administration is in a legal battle with California over whether it can revoke the state’s longstanding power under federal law to require tougher auto standards. 
  • the Trump Administration suspended much of the EPA’s enforcement of environmental laws.  Then it acted last month to advance a new rule to limit the science the EPA is allowed to consider in its day-to-day analytical work.
  • the EPA is moving towards a rollback of coal power plant standards that limit the amounts of brain-damaging mercury and arsenic the plants release.  The EPA is seeking to change how the costs and benefits of environmental rules are calculated, downplaying the savings from improved human health while elevating the costs to polluters to implement them.
  • the Trump Administration weakened the Clean Water Rule to roll back clean water regulations limiting discharges from various industrial facilities, including power plants and petrochemical plants.
  • the Administration weakened regulations issued under the Toxic Substances Control Act (TSCA) by providing regulatory relief and fee exceptions for a wide range of chemical manufacturers, including petrochemical manufacturers.  TSCA is the main federal law regarding the safety of chemicals used in commerce.
  • the EPA has allowed power plants to delay testing and reporting under federal Acid Rain and Cross-State Pollution programs, citing the impact of “travel, plant access, or other safety restrictions implemented to address the current COVID-19 national emergency.”
  • the Department of Transportation has moved to finalize the weakening of some pipeline safety requirements, including creation of oil spill response plans and safety and reporting requirements for pipelines transporting hazardous liquids or carbon dioxide.  Weakening those requirements increases the risk of spills from oil pipelines.

The rationale for these actions?  The underpinning for many of these Trump Administration actions is its anti-science bias. However, these recent actions have a lot to do with 2020 potentially being the final year of the Trump Administration (unless re-elected this Fall).  The Administration faces an artificial deadline set by the 1996 Congressional Review Act that allows a simple majority in Congress to easily reverse the Administration’s rollbacks in 2021, if the President is defeated in November.

But the law only applies to regulations that were passed in the final 60 days of the congressional calendar.  The Trump administration is racing against the clock to limit the ability of a future Congress to undo his anti-environment regulatory actions.  This means that this surge is just the beginning of actions that will be taken until the end of May.  If the President is defeated, a new Democratic Administration could spend much of its first term slowly working to reverse the policies implemented by the Trump White House. 

While the nation is understandably fixated on the enormity of the coronavirus pandemic, the Trump Administration has been busy as bees rolling back protections for the environment and public health.  The nation should be celebrating the 50th Anniversary of Earth Day. Instead, under the cloak of the virus, the quality of the nation’s environment is experiencing unprecedented destruction.  This is the Trump Administration’s way of “celebrating” our one and only planet.