Governor Cuomo delivers budget update from the Red Room
A rush transcript of the Governor’s remarks is available below:
Good afternoon. To my right, for those people who have been on a different planet for a while, to my right is Secretary Melissa DeRosa. To my left, Alphonso David, Counsel to the Governor. To his left is Budget Director Robert Mujica. They are all significantly sleep deprived, so please don’t take advantage of them. I’m sleep deprived, but I’m actually less sensitive when I’m sleep deprived.
We want to give you a quick update on the budget before you take off for the weekend. For me, again, the budget is in a broader context. I know you, a lot of talk about the budget on individual items, but just remember the landscape that we’re dealing with. We have a $2.3 billion deficit, shortfall in revenue, which I believe is attributable to the federal tax reform, which I believe is taking a toll on New York. I’m worried about the economic trajectory of the state. I spent yesterday with Mr. Kudlow on a follow-up meeting with President Trump about SALT, and the effect on SALT, and the unfairness of SALT, and the great irony to say you want to help build an economy in this country, but you have a tax reform plan that hurts New York State, California, two of the largest economic engines. I’m worried about the precedent of Amazon, what it says to businesses who would come to New York. So, that’s the context for what we’re dealing with.
I’ve stated clearly from the beginning what the priorities were in this budget. I’ve said them over, and over, and over again, and they haven’t changed. First priority, directly linked to the context, is the fiscal integrity of the budget. It’s math, the numbers have to add up. I know everybody wants to spend everything, so do I. But, there’s still an economic reality and the fiscal integrity of the budget.
The permanent property tax cap, because that is directly related to SALT and the instability of New York citizens, and taxpayers and homeowners. That was a top priority, still is a top priority.
Congestion pricing, MTA reform, we tend to focus more on the congestion pricing part. The MTA reform is actually just as important. Reorganization of the MTA, changing the rules about board members and holdovers on the board. Changing the contacting procedures of the MTA to use design-build. Allowing and mandating that the MTA debar bad contractors. A full audit of the MTA. A review of the East Side Access project, which is the project that began before many of the people in this room were born and is still going on, and bringing in a different team to review that the way we did with the L Train. Doing away with the secret pocket veto of the capital plan.
Criminal justice reform, where we have made some progress. But there is more to do – speedy trial, discovery, cash bail. And working through cash bail primarily on the different classifications. And public finance, campaign finance reform, and getting that done. Those have always been the priorities and they still are the priority and I won’t do a budget without those priorities. As they said, I want to get a budget done on time but it’s more important to have a budget that is right. We have never passed a bad budget. We have never passed a budget that turned out to be wrong. I’ve never come back and did what’s called the mid-year correction, which is what you have to do when the budget doesn’t work. You have to come back mid-year and adjust all the numbers. And that creates great instability to all the institutions in this state that were depending on that budget: school districts, hospitals, etc. And where we are now in the state that’s the last thing I want to see happen.
On a number of items, we have made progress and I’m excited about it. Plastic bag ban is something I’ve been trying to get. I think that’s going to make a significant difference. The way that works, there’s been a number of explanations out there from people who don’t have all the facts. It’s a five-cent paper fee if the local government opts in, of the five cents three cents goes to the State Environmental Protection Fund, two cents stays with the local government if they will run a reusable distribution bag program locally. If they won’t, that two cents goes to the state also to run a reusable bag program in that area.
In terms of the numbers, and the fiscal integrity of the budget, I feel good about that. The numbers are very close to the proposed budget, education aid is up about $50 million. We also have on the education aid prioritization of core schools in school districts, which was a priority for me. All these groups, everybody does a press conference, we have to get more money for poor schools. Yeah, well then why hasn’t the state ever said local school districts should prioritize poor schools. This year we will, there will be a transparency addition so we’ll know exactly where the funding is going.
Voting reforms, we did many, and this budget we’re going to do the reconciliation at the same time for the upstate polls to open as downstate. I never understood why upstate had a different, shorter period of time to vote than downstate New York. We also have on voting reforms early voting, we talked about and a state holiday where that I think is going to be the most progressive holiday of any state, three hours paid vacation from a public or private employer, so people can actually go out and vote.
We’ll close more prisons, I’ve closed 24 prisons, more prisons than any administration in the State of New York, and I’m proud of that. We’ll close up to three prisons, depending on the number of beds we need. But that’s another symbol of the reformation of the criminal justice system. Why can you close prisons, because you have more alternatives to incarceration, you’re locking up fewer people, which is a good thing. I understand the rationale in upstate New York, they don’t like to see a prison close, it means jobs and economic development. But I’m not going to rationalize locking up people as an economic development tool.
Women’s issues, we’ve made progress, IVF coverage, freezing coverage. Statewide maternal mortality review board. Rape shield protections. We are working on a substantive pied-a-terre tax that we’re still working on which would basically be a real-estate transfer tax on high-end properties, residential and commercial, we’re working through that. The internet sales tax for counties is an open issue. Marijuana is the biggest single issue. When you go back and look at the 100 days agenda that we did, literally before January I listed the 100 days agenda. Probably the biggest single issue that will not be addressed is the legalization of marijuana. That is in concept, we have agreement. But that is all about the devil is in the details. And that is going to take more time to work-out. We talked about that several weeks ago. The legislature signaled that they didn’t think it would be ready for the budget. I then substituted the revenue that went in congestion pricing for marijuana to the pied-a-terre tax at that time so, that’s not really a surprise. But if you ask what is not going to get done, what’s going to be carried over, the main thing is probably going to be marijuana legalization.
That’s—if I did it all?
Melissa DeRosa: The Affordable Care Act.
Governor Cuomo: Affordable Care Act—why don’t you do the Affordable Care Act?
Melissa DeRosa: We’re codifying the protections of the Affordable Care Act into State law. As you all remember, we did the health exchange by Executive Order in 2011 because the Republican Senate refused to do it. So the Governor did it by Executive Order and then there are a number of protections provided by the Affordable Care Act and things like pre-existing conditions that are still continued to be under threat as recently as earlier this week. President Trump asked the courts to take another look at it. It’s clear that their war on healthcare is far from over. So, the Governor and legislature have come to an agreement to codify much of the Affordable Care Act and the health exchange into law.
Governor Cuomo: The President is only the President-can—he wants to end Obamacare but he doesn’t know what he would replace it with. Anyway—let’s take some questions.
Question: Governor, you mention the transfer taxes for high end properties—what value, is it residential or commercial?
Governor Cuomo: Both—and that’s what we’re working through, now, Jimmy. I don’t have an answer for you.
Question: [inaudible] commercial properties?
Governor Cuomo: One of the option is residential and commercial properties, yes. That are being considered, it’s an option being considered.
Question: What is the holdup you’d say, for congestion pricing? It seemed like on Monday that legislators had sort of committed to get there. Just curious what the details are that have been more difficult?
Governor Cuomo: First of all, it is very big, very big reform, right? When you think about, someone asked me what are the biggest things that we’ve accomplished, I would say marriage equality on social policy, $15 minimum wage on economic policy, congestion pricing would be the biggest thing we did on transportation, urban policy. Mayor Michael Bloomberg tried to get it over 10 years ago. It’s a big deal politically, it’s a big deal logistically. And the speaker, Speaker Carl Heastie has been working very hard in his conference. I believe conceptually we have agreement. But now you have to go through the details and I said, it’s not just the congestion pricing, it’s also the MTA reform issues. Because I said I would not support more funding for the MTA unless I felt comfortable that we had a better MTA, more efficient, more effective. So, the devil is all in the details, right? And that’s what we still are working through.
Question: What about the public campaign finance reform, is that going to happen or is there still resistance in the Assembly?
Governor Cuomo: Public campaign finance reform is a priority for me in this budget. I would be very disappointed if we didn’t get it in this budget. I don’t see any reason why we can’t. We’ve talked about it for a long period of time. Everyone says they support it. Well then, let’s do it. Now, it is complicated to enact the rules and regulations. Fine. But, let’s figure out how to do it and I see no reason why we can’t do that in this budget.
Question: Governor, would you issue an ultimatum, maybe no message of necessity unless it’s included? Or are you not at that point?
Governor Cuomo: The, look I’m at the point, I’ve said I’m not going to do, doing the right budget is more important than doing it on time and these are the elements that I believe have to be in a right budget. And I believe public financing has to be in the budget. And I don’t see a reason why it shouldn’t be in the budget, right? If everybody says, I support it, I support it, I support it. Then good, let’s get it done. I do understand the logistical problem of there’s a lot of questions here, it’s not just one city, it would be statewide. It would be legislative races, statewide races. What is the match? Who qualifies? Is it the same amount in New York City vs. Albany vs. Buffalo? How many races will you run? How many races will you run? How many lines? I get it, but we can come up with a way to figure that out.
Question: On the issue of limousine safety and limousine insurance, what provisions will be in the budget on that?
Governor Cuomo: Do you know the—
Alphonso David: I do. We’re still in the process of finalizing the proposal, but we anticipate that there will be increased criminal penalties for those that knowingly violate the law and operate limousines or buses that are out of service or labeled to be out of service. There will be increased civil penalties as well, and there will be additional requirements that anyone who is operating a commercial vehicle has to register and go through testing.
Governor Cuomo: [Inaudible] mayoral control for the New York City Department of Education will be renewed. The legislature has added a number of conditions that are new. More parental involvement, more community involvement, but I think it makes the system and everyone’s agreed to it.
Question: Governor, you’ve spoken repeatedly about the need to protect immigrants and the vital role they play in our state. Can you explain the rationale for eliminating the legal aid for them, the Liberty Defense Project or whether that’s been restored [inaudible].
Alphonso David: The Liberty Defense Project will continue. The Governor has committed to making sure that that project continues at the Department of State and for those who may not know, it provides legal services to immigrants. We anticipate we’ll be fully supporting that program throughout the year.
Question: [Inaudible] had been what they had gotten previously
Alphonso David: That’s not accurate. We have actually invested $10 million every year, and so we’ll be continuing to support the program.
Question: Governor, on cash bail, both sources in the Assembly and the Senate say basically there’s a framework for a deal whereby misdemeanors and non-violent felonies would not be subject to cash bail, but more violent felonies would be subject to some sort of cash bail. Can you comment on that?
Governor Cuomo: There is a framework, yes. The details have to be completed. The place there is no agreement right now is on violent felonies and the majority of the people effected are the misdemeanors and the non-violent felonies and that needs to be completed, but there’s conceptual agreement there. There is conceptual disagreement on violent felonies and how to handle that and that’s where we are now stuck I would say.
Question: Is the disagreement about whether it would be cash bail or some other sort of mechanism
Governor Cuomo: If it’s not cash bail then what would the circumstances be for remand? Would the person be entitled to a hearing, et cetera? That is the point of contention within different factions in the legislature.
Question: But you anticipate there will be some sort of deal to allow, say the 75-85 percent of incarcerated—
Governor Cuomo: At this point I would. The details are not there, Jesse, but if I had to guess, I would guess yes.
Question: The property tax cap—legislative leaders indicated that they think it will be in there and make it permanent. Do you feel like it’s going to be in there? And also there’s some talk about some minor exemptions to it—
Governor Cuomo: If it’s not there, there is no there.
Governor Cuomo: Then there is no there if it’s not there.
Question: Have they said it’s in?
Governor Cuomo: It will be in or nothing will be in. There will be no budget without a permanent property tax cap.
Question: Governor, why should motorcycles be exempted from congestion pricing?
Governor Cuomo: Why should motorcycles? Because I ride a motorcycle, that would be a reason. I don’t know. Does anybody know? Are they exempted from congestion pricing?
Robert Mujica: It was in a version of the bill. Most of the jurisdictions that allow for motorcycles and mopeds to be exempted, they’re on most lands, federal government actual requires them to be on HOV lanes. They don’t contribute to congestion, they actually reduce congestion, so for those reasons.
Governor Cuomo: I believe it’s because Robert Mujica rides a motorcycle. I never heard of the exemption, just to be clear.
Question: What’s the status of the proposed healthcare cuts that were in the 30-day amendments?
Governor Cuomo: The healthcare has been restored, right? Healthcare has been restored.
Question: [Inaudible] lawmakers was tied to a timely budget. If all the budget [inaudible] tonight, are you willing to issue messages of necessities?
Governor Cuomo: We don’t even have an agreement, so timing isn’t the issue. We don’t have an agreement.
Question: [Inaudible] a number on the increase in school aid?
Governor Cuomo: About $50 million. Both are proposed.
Question: [Inaudible] three percent, which is what [inaudible]
Robert Mujica: The Governor’s budget proposal was about 3.6 percent. This is going to be about 3.7 percent when we’re done.
Governor Cuomo: We were 3.6 in the proposed. This is $50 million more. Anything else that I—any mistakes I made? Tell them now. I do not fear embarrassment. Thanks you guys.