New York lawmakers continue to move ahead on developing a state budget that is due to be in place by April 1^st. After the governor introduced her budget in January, state lawmakers held hearings on her plan to obtain testimonies from agency heads and stakeholders, and on March 1^st the governor and the Legislature agreed on available revenues. According to their estimates, the state has an additional $550 million to $800 million in expected revenues to allocate in the upcoming 2025-2026 budget.

This week it is expected that both the state Senate and the Assembly will release their counterproposals to the governor’s budget plan. The “normal” process would be that the leadership of both houses then meet with the governor to hammer out a final agreement.

This year’s budget debate, however, is being conducted under the dark shadow cast by the Trump Administration and the new Congress.

The House of Representatives has advanced a budget plan that contemplates big cuts to federal programs and the extension of a massive tax cut. Despite comments that deep programmatic cuts are needed to tackle the federal government’s yawning deficit, the tax reduction makes that gap even larger.

The House’s plan, which will need to be adopted by the Senate in order to move to the President, is vague on key details. For example, the plan calls for cutting $2 trillion in spending over the next decade, without specifying which programs should be cut, although it is widely expected to dramatically impact the nation’s Medicaid program.

That’s troubling for New York as Medicaid, health insurance available to those of modest income, is the biggest expenditure in New York’s state budget. In addition, Governor Hochul’s budget plan includes an expectation that the state will receive over $90 billion in federal assistance.

But the timetable for Congressional action is unclear. At best, the federal budget is approved well after New York’s fiscal year begins. Yet the development of a federal budget plan has been chaotic, to say the least; and with narrow Republican majorities in both the Senate and House, unless a bipartisan agreement develops (at this point seemingly extremely unlikely), it will be difficult to have a final agreement in place before New York lawmakers must act.

Under the circumstances, it will it be hard to fashion a Republican budget consensus, for now leaving the details of what programs will be cut and by how much as anyone’s guess. And to make matters worse, unless some sort of short-term agreement can be finalized by the end of this week, some areas of the federal government will run out of money and have to close down. Faced with this prospect, the House leadership is currently floating a stop-gap plan to keep the government open through the Fall while a more permanent plan can be put in place.

Given those uncertainties, how can the governor and legislative leaders cobble together a final budget?

Governor Hochul’s executive budget plan anticipates a “normal” Congressional outcome, one in which the federal government sticks by its financial obligations to New York and muddles along as in years past.

Whether that assumption turns out to be reasonable remains to be seen. In the meantime, what does Albany do?

In the short term, a reasonable approach would be to work with the plans advanced by the governor and each of the houses. Lawmakers have raised their concerns about Washington’s “dark shadow,” but they have little to go on. New York’s budget deadline is the end of this month, so state lawmakers and the governor have a responsibility to put a budget in place by then based on the best information currently available. It is possible that Washington will “kick the can” on a budget agreement until later in the year. If so, state lawmakers could return then and make adjustments to New York’s budget once the dust settles over the Congressional budget agreement.

In the meantime, the state will have to deal with well-known problems that will likely get worse if federal cuts are enacted. Problems like private colleges whose finances are weakening, funding for environmental programs to protect drinking water and address the worsening climate, help for struggling municipalities, the list goes on.

Whether the new Administration and the new Congress will make things worse for New York, only time will tell. Governor Hochul has put aside over $20 billion in reserve for a financial “rainy day.” The way things are looking, that “dark shadow” cast by Washington may mean financial rain clouds. However the nation’s and state’s budgets play out, we should be getting ready for a stormy few years.

The second step in developing a state budget wrapped up last week with the Legislature holding its final hearings on the governor’s proposed fiscal plans (that was the first step). Lawmakers held four hearings with two big ones related to the state’s future economy: higher education and economic development.

New York spends billions on its economic development programs, more than virtually every other state. Nearly two-thirds of those costs are tax incentives given to private businesses, which reduce the amount of revenue that state and local governments otherwise would have collected. 

Those programs have been subject to ongoing criticisms, in particular for the state’s failure to conduct a comprehensive review that evaluates whether these programs actually work. The state support for such programs hinges on the promise that they will generate jobs and stimulate economic activity. There are few mechanisms for real-time evaluation, in particular to answer the “but-for” question: Would companies have hired workers or made investments at the same level they did but-for the tax incentives? In other words, was the tax incentive necessary to induce the companies’ investments or would they have happened anyway?

According to some analyses, the answer to that question is “no.”

In addition, some tax incentives make little sense. For example, New York law allows for tax benefits for the use of fossil fuels, usually to protect consumers from some taxes, like buying home heating products.

In the age of climate catastrophe – and possibly shrinking federal support – tax incentives for oil, gas or coal products should be examined carefully. Advocates urged that the Fossil Fuel Subsidy Elimination Act, which will end $336 million in oil and gas subsidies that benefit corporations, be included in the budget.

Yet, these incentive programs are continued, developed, and often heralded year after year – despite failures.

That debate about tax breaks raged loudly during the hearing on economic development.

The higher education hearing focused, not surprisingly, on the governor’s plans for funding those institutions. But there was a big element of economic development there too.

As some advocates testified, higher education remains one of the smartest investments both the state and individuals can make in creating economic mobility and breaking cycles of poverty. Study after study makes it unequivocally clear that college graduates are better positioned to land higher paying jobs, earn more over the course of their lives, have more in savings, and contribute more in taxes.  Moreover, the state’s colleges generate significant economic activity, with $8 in economic activity for every $1 of state investment.

There was one proposal advanced by the governor that did get a largely positive reaction from lawmakers. The governor advanced a free community college program. However, the governor’s free tuition plan comes with a twist: It would be available to community college students ages 25-55 choosing classes that result in high-demand jobs, particularly in the upstate region. 

While most lawmakers admitted that the proposal was a good first step on which to build, questions were raised. One criticism was that academic disciplines disfavored by particular employers should not be a luxury for those who can afford it. So, instead of tipping the scales in favor of specific fields and further squeezing the humanities, some lawmakers urged that the final budget agreement offer this program to students regardless of which major they choose.

Free tuition to public colleges is of course hardly a new idea. The limitations proposed by the governor are likely the result of trying to minimize the financial cost to the state. If lawmakers choose to add more money, that probably means a more expansive program.

One thing for sure, the final budget will likely spend billions on economic development. Whether higher education – and free community college – gets the funding it needs, only time will tell.

It’s beyond argument that the governor and state lawmakers should focus resources on programs that work. Less ribbon cutting and press releases and more investments in higher education will not only help the state, but concentrate on an important sector that, year in and year out, delivers on its promises.

Monday February 24^th kicks off the last week of the Legislature’s public hearings into Governor Hochul’s proposed budget. One of the biggest issues under the microscope this week: the financing of higher education.

The title of the hearing should be “promises made, promises broken.”

For decades, New York offered the neediest public college students assistance that covered full tuition through the Tuition Assistance Program (TAP) at the State University of New York and the City University of New York. While the relationship between the two – SUNY tuition and the maximum TAP award – was unwritten, the promise was there for decades. However, that promise was broken in 2011.

Starting with the Cuomo Administration, the maximum TAP award was frozen as the state continually raised public college tuition. In the former governor’s first year, New York adopted a new approach that would annually raise public college tuition rates but keep the maximum TAP award “frozen.” 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.

That “gap” swelled over time and became known as the “TAP gap.”

The policy of keeping the maximum TAP award frozen while increasing public college tuition destabilized some SUNY colleges. Over time, the “TAP gap” eroded public colleges’ finances as they were regularly being asked to cover rising tuition costs for their poorest students. For example, institutions like Buffalo State University were already cutting programs, freezing hiring, and offering voluntary separations to reduce costs. The devastating one-two punch of higher public college tuition and frozen TAP further strained institutional budgets, reducing tuition assistance revenue and deepening financial challenges.

Independent colleges were hit too. Students attending those institutions also are eligible for TAP. 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.

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

Aid to certain non-public colleges and universities, popularly known as Bundy Aid, is a program that provides direct unrestricted financial support to independent postsecondary institutions located in New York State. The program was established in 1968 through a Select Committee charged with “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.” The Committee’s report recommended that “the moderate but real level of need calls for direct assistance from New York to private colleges and universities.” Distribution of the assistance is based on a formula derived from the number of degrees an institution has granted.

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 nearly $22 million. If New York had merely kept pace with inflation, the amount of Bundy Aid should be around $260 million – not $22 million.

Not surprisingly, many colleges – usually small ones – have seen their finances stretched to the limit – and beyond. New York has seen six colleges (a total of ten degree-granting institutions) 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.

Originally designed to uphold the strength and vitality of independent institutions of higher education, Bundy Aid once stood as a testament to the state’s promise to keep that sector alive. The devastating cuts over the past three decades have left too many teetering on the financial brink – another “promise” broken.

But you’re wondering, 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. They offer a stimulus to local economies that are virtually guaranteed to succeed. For example, SUNY’s economic impact in New York State is $28.6 billion. For every $1 invested in SUNY, New York State’s economy benefits the equivalent of $8.17 and is responsible for nearly 2% of the gross state product.

The benefits are generated by independent colleges too. In fiscal year 2022-23 independent colleges and universities in New York State contributed an estimated $97 billion to the state’s economy and supported more than 407,000 jobs.

Whether the state’s political leadership agrees that New York’s economic future hinges on a robust system of higher education – and therefore they decide to make good on their so far broken promises – only time will tell.

New York’s growing trash crisis has been well-documented. The state’s capacity to take this problem on is dwindling. According to a 2023 report by the state’s Department of Environmental Conservation (“DEC”), “New York’s 25 municipal solid waste landfills have a combined landfill capacity of between 16 and 25 years.”

The number one place that residential trash goes to is a landfill; number two is export for disposal; number three is garbage-burning incinerators; and last is getting 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. By the way, these disposal methods can contribute to the climate crisis: Solid waste accounts for 12% of statewide greenhouse gas emissions, most of which comes from decomposing waste in landfills.

If the state’s landfills are filled to capacity in a decade or so, what will happen? Trucking the waste somewhere else is likely to be the option, but that is expensive and uncertain: Who knows for how long someone else will be willing to take New York’s trash? Already, New York City exports nearly all of its trash. Unless something changes, the rest of the state will have to follow that very expensive route.

But sending the trash “somewhere” has huge problems.

For example, plastic waste increasingly ends up in developing countries – communities without regulations to handle the waste appropriately. According to reporting in the New York Times, in Kenya cattle have been found to possess plastic in their stomach linings, while 69 percent of discarded plastic enters a water system. In Indonesia, plastic waste is so mishandled that 365 tons of it enter the sea every hour. As a result, mismanaged trash in the developing world is linked to the death of hundreds of thousands every year.

Yet the plastic pollution problem may get much worse.

Last week, the soft drink giant Coca-Cola, warned that the Trump Administration’s proposed 25% tariffs on foreign steel and aluminum entering the U.S., which could push up the prices of canned food and drink, will result in it shifting some of its beverage containers away from aluminum and toward plastic.

Increasing tariffs on aluminum may well result in making New York’s trash problem worse, not better, since plastic is nowhere as easy to recycle as aluminum. The recycling rate of PET bottles and jars was 29.1% in 2018, compared with the recycling rate of aluminum beer and soft drink cans at 50.4% in the same year, according to data from the Environmental Protection Agency. Given New York’s anemic, and slipping, recycling rate, more plastic waste means more trash that must be disposed of.

What should be done? Here are three measures that Albany must act upon this legislative session:

First, increase spending on recycling. Governor Hochul is proposing to freeze spending for the state’s Environmental Protection Fund. That Fund provides – among other things – funding for “encouraging recycling; providing safe disposal of household hazardous waste; ensuring safe closure of landfills; and developing markets for waste materials.” The executive budget keeps funding flat at $400 million. A wide array of groups have urged an increase in that to $500 million.

Second, force packaging manufacturers to be more accountable for their wastes. The Packaging Reduction and Recycling Infrastructure Act will dramatically reduce plastic packaging, phase out some of the most toxic chemicals used in packaging, and improve recyclability of packaging.

Third, modernize the state’s Bottle Deposit Law, also known as the “Bottle Bill.” 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 Bottle Bill as a “tremendous success.” But many beverage containers are not covered under the law and the deposit has been a nickel for four decades, if adjusted for inflation that nickel would be worth 15 cents today. Expanding the law to all beverages – like iced teas and sports drinks – and increasing the deposit to a dime, would go a long way in making the program work even better.

Modernizing the Bottle Bill would not only help with the trash crisis, but according to a recent report, it would boost state revenues by as much as $100 million – money that could be used to help with the trash crisis.

Lastly, redeeming more aluminum cans would also help companies, like Coca-Cola, expand the supply of easily recyclable containers to help respond to the Trump Tariffs. A win, win proposition.

The measures would reduce packaging waste and promote the concept of a “circular economy” – one in which wastes are reduced to a minimum. Boosting funding of the state’s EPF would also help reverse the state’s decline in recycling.

As lawmakers return to the Capitol next week to start to hammer out next year’s budget, they must tackle the solid waste disposal crisis head on. The packaging reduction, bottle deposit law, and EPF are three good places to start.

State lawmakers continue to review Governor Hochul’s $252 billion proposed budget. This week’s big hearing focuses on health care – by far the largest chunk of state spending. According to the governor, New York is expected to spend over $100 billion of the $252 billion proposed budget on health care.

That’s a lot of money and it dwarfs all other spending. With that much of the state budget focused on health care, a good question to ask is how well does the system work?

Of course, defining how well a system works depends on how you look at it. New York State has one of the highest rates of health coverage in the nation, with about 95 percent of the public covered.

But when it comes to the quality of hospital care, New York lags.

Why does this matter? First off, no one wants to go to the hospital and get hurt. In November 1999 the Institute of Medicine report, To Err is Human: Building a Safer Health System, was released. It documented a veritable epidemic of tens of thousands of preventable deaths in United States hospitals. Then in 2013, a widely-covered study published in the Journal of Patient Safety reported that nearly 400,000 U.S. hospital patient deaths each year were preventable.

Those numbers are staggering.  And experts now consider deaths due to medical mistakes as the third leading cause of death in America, behind heart disease and cancer.

Second, poor quality care is a waste of money. According to experts, higher quality care is less expensive care. Thus, developing recommendations to improve the quality of care will not only lessen unnecessary patient injuries and deaths, but will also make the system more efficient in its use of public dollars.

A key way to improve patient safety is making the quality of health care delivery transparent.

Perhaps the most comprehensive safety guide is the hospital ranking issued by The Leapfrog Group (http://www.leapfroggroup.org/).  Leapfrog was created over 20 years ago by large businesses that were frustrated by the lack of quality health data.  The businesses usually negotiated coverage for their employees yet lacked the data to comparison shop. The Group issues its ranking twice a year.

In its most recent report, Leapfrog Group found that New York State ranked 34^th nationwide in terms of quality, with only one fifth of hospitals receiving an “A” grade. In addition, according to Leapfrog, New York’s hospitals ranked seventh nationwide in terms of having the highest percentage of poor-quality grades – and has the most hospitals in that category overall.

Why do New York hospitals perform comparatively so much worse? In July 2019 the director of Leapfrog Group, explained what she knew about New York’s hospital safety:

“The system as a whole didn’t seem to have emphasized safety. We’ve seen other states work together and look at what’s working well at other states and implement it. It just doesn’t seem to be happening in New York. It has to be front of mind every single day in a hospital.”

New York State is the single biggest non-federal “purchaser” of health care through its Medicaid program and Essential Plan (projected to be approximately $124 billion combined) alone and its funding of the state employee health insurance programs, Empire Plan and NYSHIP. Yet, as seen in the Leapfrog Safety Grades, the state simply does little to ensure that the quality and value of the health care services paid for with taxpayer money meets the highest standards.

New York has a fiduciary responsibility to the taxpayers to leverage its buying power in ways that reward safety, quality and efficiency, and penalize those who fail to meet standards of high-value, high-quality health care. It is time for New York policymakers to ensure that the state is doing all it can to embrace “prudent purchaser” programs that drive patient safety.

These analyses raise serious questions for New York’s lawmakers considering the health budget. Questions should be asked of the Health Department, such as why did New York State hospitals rank so poorly? What has the Health Department done to respond to the national rankings that have consistently found poor quality in state hospitals?

Failing to get answers to those questions not only costs taxpayers money but puts too many New Yorkers’ health at risk.