New York State legislators made their annual return to Albany for the start of the 2018 legislative session with no shortage of issues to deal with. The state is facing its first major budget crunch since Governor Andrew Cuomo (D) took office in 2011—an estimated $4.4 billion budget gap—which comes on the heels of the new federal tax overhaul expected to have a devastating impact on downstate suburban residents. This is also an election year in New York, which means that the Governor, Attorney General, Comptroller and every member of the state legislature are up for reelection.
The constraints on the state budget, election year considerations and political turmoil out of Washington will complicate the 2018 session in a number of ways:
- How left can the guv go? It's no secret that Governor Cuomo has a problem on his left. Long seen as a political pragmatist most comfortable in the center of the political spectrum, the Governor has been tacking left ahead of the 2018 elections—and a potential 2020 presidential run. After a surprisingly formidable primary challenge in 2014, the Governor appears determined to put to rest any questions regarding his liberal bona fides. His State of the State address on January 3 focused heavily on threats from the federal government and advanced an array of liberal proposals, including a package of sexual misconduct measures, the elimination of cash bail for non-violent felonies, and state pension fund divestment from significant fossil fuel holdings and investment in companies with significant minority and female representation on their boards and executive teams. It remains to be seen whether the Governor's efforts will be enough to shake off a challenge from his party's energized liberal base in 2018.
- A fragile Senate: The Republican Senate majority coalition has been remarkably resilient in deep blue New York, holding a 32-seat majority in the 63-seat chamber thanks in part to Senator Simcha Felder who, although elected as a Democrat, has caucused with the Republicans since taking office. In the closing months of 2017, Governor Cuomo brokered a "reunification plan" between the mainline Senate Democrats and a breakaway group of eight Democratic senators, known as the Independent Democratic Conference (IDC), who had formed the governing coalition with the Republican majority. The mainline Democrats and IDC have agreed in principal to the plan, which would see both groups come together to form a governing coalition after the state budget in March and two special elections in April. However, nothing is certain in Albany, and Democratic victories in the special elections and a Democratic/IDC reunion would still fall short of the 32-seat majority threshold— unless Senator Felder were to cross the aisle. That said, a change in Senate leadership would have a seismic impact on the legislative agenda, and we will be closely monitoring the situation as we move toward April.
- Election-year drama: State and national political observers have spent no small amount of time handicapping the 2018 election season, including in New York, where there is no shortage of complicating factors to consider as the new year unfolds. These include the federal corruption trials of two top advisors to the Governor, the retrial of two former legislative leaders, the recent indictment of a state Assemblywoman on fraud charges, and New York City's failing subway system (see below), not to mention the federal tax plan's changes to deductions for interest on high-end mortgages and state and local taxes (SALT), and myriad other possible policy actions out of Washington inimical to the state's interests.
Despite the steady drumbeat of attacks out of Washington on the Affordable Care Act and other major government health care programs, Governor Cuomo's State of the State health care agenda was surprisingly sparse. He promised to protect Medicaid and the Children's Health Insurance Program (CHIP), but provided little in the way of details about how these programs would be protected or funded without assistance from the federal government. Other initiatives included in the address aimed at tackling the opioid crisis by taking enforcement actions against pharmaceutical opioid distributors and expanding telehealth services to rural parts of the state.
Education policy initiatives were similarly sparse in the Governor's State of the State. With respect to the P-12 level, the Governor said that the state is committed to making sure that local school districts that receive state grants are distributing aid to the poorest schools in their district. He also touted the expansion of the state's "free" SUNY/CUNY Excelsior Scholarship Program; the income ceiling for eligibility increased to $110,000 from $100,000 effective the next academic year.
With New York City coming off a so-called "summer of hell" that included major mass transit disruptions which left commuters stranded across the region, it was no surprise that, in his State of the State address, Governor Cuomo, with support from legislative leadership, focused on investment in the Metropolitan Transportation Authority (MTA) and other transportation upgrades, including construction of a tunnel for cars and trucks beneath the Long Island Sound to connect Long Island with Westchester or Connecticut, and the long-awaited restoration of Penn Station. Notably absent was a much-anticipated congestion pricing plan which would fund MTA upgrades by charging drivers who travel in New York City’s most congested areas during peak commuting hours. Details of the plan are expected to be released before the state budget is delivered on January 16.
Taxes and economic development
The recently passed federal tax overhaul and specifically its curbs on the state and local tax (SALT) deduction is expected to be a major challenge for the state in 2018. Like other high-tax states, New York will be hard hit by the cap on these deductions and Governor Cuomo has not shied away from speaking out on this issue. As part of the state's response, he has vowed to sue the Trump administration on the grounds that the law unconstitutionally discriminates against New Yorkers and constitutes double taxation. The Governor is also exploring a shift in the state tax code away from income taxes to payroll taxes, and allowing some payments to be treated as tax-exempt donations.
As noted above, the Governor put forth a package of sexual assault proposals that are expected to find broad bipartisan support from the legislature, including legislation that would codify the federal definition of sexual harassment in state statute, prohibit secret settlements by public entities and end mandatory arbitration of sexual harassment and discrimination claims. The Child Victims Act, legislation that would allow child sex abuse victims to bring civil cases up until his or her 50th birthday, allow the state to bring a felony criminal charge up till the victim's 28th birthday, and provide a one-year window to revive an old case, is expected to be prominent issue in the 2018 session. Advocates for the legislation have pushed hard to see it included in the state budget. The legislation passed the Democratic-dominated Assembly last session, but final passage has been held up by the GOP-controlled Senate for a number of years.