Inside the NY State Budget Process with Assembly Speaker Carl Heastie

Dan Clark: We are now two weeks out from this year's state budget deadline on March 31st, and we took a step closer to a final state budget this week when both houses of the state legislature approved their one House budgets.

That's when lawmakers build their own budget plans as a sort of rebuttal to the governors. That's important because it shows us where lawmakers stand on top issues. We're going to go through a few of them and tell you where the legislature wound up.

On housing, the governor wants to build 800,000 new homes and allow developers to override local zoning laws to get there. The legislature kept that target but doesn't want to override local zoning. Instead, they want to offer financial incentives for that growth.

On the minimum wage, the governor wants to tie it to inflation moving forward. The legislature likes that idea, but also wants to raise it first, though we don't know by how much.

On income taxes the governor wants to keep those flat this year. The legislature mostly agrees, but they want to raise taxes on people earning more than $5 million to fund more services.

On cigarettes, the governor wants to raise the tax on a pack of cigarettes by one dollar, to $5.35 and ban menthol flavored tobacco. The legislature is fine with the tax hike but doesn't like the ban on menthol.

On new funding for the MTA, which isn't doing well financially, the governor wants to raise payroll tax downstate and use casino gambling revenue. The legislature is fine with using the casino money but wants to raise corporate taxes instead of a payroll tax.

Finally on the topic of charter schools, Hochul wanted to allow more in New York City by lifting a regional cap, but the legislature is against that idea.

It's a lot to work out in two weeks, but Senate Majority Leader Andrea Stewart-Cousins thinks they can get there.

Andrea Stewart-Cousins: I think we all looked at the issues and yes, there are again different approaches, but what I always say is that we're all rowing in the same direction for the most part, and so that's always easier.

DC: On the other side of the aisle, Senate Republican leader Rob Ortt said the Democrats budget plan fell short for struggling New Yorkers.

Rob Ortt: We've seen that people said affordability is an issue. This budget does nothing to help New Yorkers who are facing affordability challenges. It spends more money, it grows the budget.

DC: Democrats say their budget plans are targeted toward some of the state's most vulnerable residents, like tenants facing eviction or people who can't afford food.

So to get a closer look on where Democrats stand on these top issues, at least in the assembly, we spoke this week with Assembly Speaker Carl Heastie

Speaker Hastie, thanks for coming back. We appreciate it.

Carl Heastie: My pleasure Dan. Good to see you.

DC: Let's start with housing. Governor Hochul has a big housing proposal in this her proposed budget. She wants to build 800,000 new housing units in New York over the next decade, but the way that she wants to do it is different than what's in your one house budget proposal. She wants to set these targets for every locality and then kind of force them into building this housing over a number of years each year.

Your proposal is different because it doesn't require that this housing get built and it provides incentives for these localities to build that housing instead. Tell me why you went with that approach.

CH: Well, for the (assembly) members, when we have our conferences, we listen to the members and, you know, overriding local zoning is a very serious issue and one that members are not too enthusiastic about doing. So what we wanted to do was, agree with the governor's goals, but we just felt like giving the localities an incentive to do it, you know, funding is important, so we tried to find ways to be assisting.

They can spend the money any way which they feel, which is rightfully important to them in their local government lives. We know that there's infrastructure issues. We'll deal with those as well. So, we just tried put it in the best interests that we could and for the locals to say, yeah, this is a good idea, and look, the state is even giving us incentives to help get us there.

DC: You also have a different part of your housing proposal in your one house budget, and I don't know if I'm reading it right, but I believe that you're endorsing what's called good cause eviction, which would require landlords to have a so-called “good cause” to evict someone. It would also kind of set a cap on rent increases in some cases. Am I reading that correctly?

Tell me about how you would negotiate that with the governor's office? I know she hasn't really been that willing to discuss it publicly.

CH: Well I mean, the governor has put things in her budget that that she wants, and so we put things in our resolution that we support. That's how the three legs of the stool between us (the assembly), the governor and Senate, we have to figure those things out. The governor has touched on some, we in this proposal, amongst others, are trying to get us to the capacity of housing we need, but also to make sure that people's lives just are not disrupted by having huge increases in their rent that really aren't set to anything other than the lease is up and the landlord has the ability to raise the rent.

Then also the disruption that if you've been a good tenant and, let's say you've been living in a place and you set your life up in that place, at the end of the lease, you know, you may have to have a life changing move. So, we just want to kind of give some stability.

You know New York City, and this isn't just a city issue, but I'm using the city as an example, that New York City is the number one renter city in the nation. So we have to do something to help stabilize tenants when it comes to the concerns about their living conditions as well.

DC: You know, property owners have pushed back on the good cause proposal, basically saying that they can't afford it. They want to be able to raise the rent as much as they want to, hopefully at reasonable rates and they don't agree with the language in terms of what is a good cause eviction. What would you say to them?

CH: Well I like I said, I always believe that there's always a way to compromise. Often a compromise is when both sides don't get exactly what they want. But also, I know there's been different ideas thrown around, and that's one of the reasons why we didn't put necessarily put in a bill. It's really around the concept of protecting tenants, but also, you know, understanding and respecting property owners as well.

But there has to be a way to not have tenants worry about rents doubling and you know, in the middle of winter your leases up and all of the sudden now you have to scramble to find housing. So it's just trying to give stability to people's lives.

You know, people are suggesting that if there's a cap that, a landlord can still find ways to go around the cap. Maybe you have it be mediated or have the courts say, yeah, there's extenuating circumstances. I think there’s a path if people are willing.

DC: I want to stick in New York City for a second. I know good cause eviction and housing is obviously a statewide issue, but in New York City, we have this really important conversation happening right now around the MTA and funding for the MTA.

The governor had proposed basically using a payroll tax in the MTA service area to fund it. I know that you have rejected that and you've also rejected a proposed fare hike for the MTA. It’s $2.75 now, it was going to go up, may still go up. You don't want that to happen, obviously. You also want to start a pilot program for free busses in each borough, which would be exciting for a lot of commuters, I think.

Tell me how you came to that instead of the governor's plan.

CH: First off, we wanted to make sure that the MTA is fully funded. Everybody knows the MTA is often described as the artery system for the body of the economy of the state of New York. So, starting there, we knew it had to be fully funded, but we just had different ideas on how to get there. We agreed with the governor on the revenue for casinos, and so we just differed on payroll mobility.

We still have one of the most competitive corporate tax rates here in New York. So, we just felt like the MTA is primarily how people get to work. So, you know, some of the corporations, particularly ones who had gotten, a tremendous break during the Trump years to just contribute a little bit more to helping to make sure that the artery system of the New York's economy is fully funded.

DC: I wanted to mention the corporate tax, but I asked you the MTA question first, because you also have a proposal in there and the Senate does as well to raise income taxes on high income earners.

We're not talking about anybody below $5 million a year, which is quite a bit of money for people. So, will the aim be for that revenue raised from those taxes to go partly to the MTA as well, or is that just to kind of generally raise money to pay for things that the state does?

CH: I'd say a little bit of both, because when the assembly put together our one house, we do try to put a financial plan. We don't just put a spending wish list out there without telling the public how we plan on paying. As much as people talk about the outflow of people from New York, we did increase number of millionaires in New York by almost 15,000.

So, just asking those who are doing well to contribute a little more to the overall good. I think it's very helpful, and that's what we are asking, those who are doing really well to help uplift the rest in society.

And I'm sorry, Dan, you did ask me one other thing about the pilot program.

DC: Oh right, free buses.

CH: It was something that members had brought up, and we know that other cities are doing this. I'd say, the closest city that's in Boston is exploring this, but we wanted to be fair and say, let's have two in each borough. One based on like poverty and things like that, and the other one will be based on economic factors, and we would leave that to the MTA to figure those out.

DC: Before I let you go, as you and I both know, time moves differently here in Albany.

You and the Senate are apart from the governor on some of these controversial issues, and as you pass your one house budget proposals, you have about two weeks left before the budget deadline. Do you think that's enough time to come together on these issues or would you rather see you go right into April and kind of have some more time to work these things out?

CH: Well, you know, in Albany two weeks is a lifetime.

DC: Could feel like two years.

CH: So, two weeks can seem like 2 minutes, but it could also seem like two years.

I'd never go into a budget negotiating session expecting doom and gloom. We're going to work hard, we want to have an on-time budget, but as I've said since the time even before I was speaker, when I was just even a brand-new member, the right budget is more important than an on-time budget.

So I would hope that we have an on-time budget, I work hard to get there, but I'm not going to accept, a budget less than what we can fairly negotiate that highlights some of the priorities that these members want. Sorry I can't sacrifice that for the sake of timeliness.

DC: All right, we will be watching over the next two weeks. Assembly Speaker Carl Heastie, thank you so much.

CH: Thank you Dan, be well.

DC: We'll hear from the Republican side of the assembly next week.