February 19, 2021
As you know, the NYS Council is leading a coalition of associations representing a wide range of community-based organizations that are fighting together for a set aside of funds currently held in a special account the Governor proposed (and the legislature ultimately agreed to) in a prior budget agreement that gives the Division of Budget sole decision-making power around disbursement of the funds this account that are accumulating as result of certain business transactions including the sale of Fidelis to Centene and other similar health plan transactions. At the present time, the special account has approximately $248M in funds resulting from such transactions. As you may recall, in 2019 the state quietly disbursed funds from the account to most New York hospitals and nursing homes to provide workforce increases to their staff. Media outlets wrote story after story about the likelihood that there had been a deal between the Cuomo Administration and the unions that represent many hospitals and nursing homes here in New York.
The article below discusses language the Governor recently added to his executive budget proposal via the 30-day amendments process that is usually used by the executive to make technical changes to its’ original budget proposal. The new language proposes creation of a new ‘COVID-19 Extraordinary Relief Fund‘ that would provide ‘funding for urgent expenses related to resolving extraordinary hardships of the COVID 19 public health emergency.’ The fund would be established with new tax revenues resulting from any /all tax proposals that are enacted as part of the upcoming budget deal. This could include funds from new tax revenue proposals including those that seek to tax high earners, etc.
As you will read in the article below, there are ongoing arguments between the legislature and the executive regarding actions the legislature can take in response to proposals the Governor includes in his executive budget proposal But at the end of the day, we need the members of the NYS legislature to step up and demand equal decision-making powers for the disbursement of any/all funds that wind up in these types of accounts including funds that might wind up in a new ‘COVID 19 Extraordinary Fund”. Lawmakers must ensure there are appropriate checks and balances and equality in decision-making as to how such funds are disbursed.
|Cuomo quietly moves to increase his control over tax revenue
By Bill Mahoney, Politico NY Pro
02/19/2021 05:50 PM EST
ALBANY — Gov. Andrew Cuomo has slipped language into his budget that would give his administration sole control over any revenue gained from tax increases that might be passed by the Legislature in the coming year.A section added to his Public Protection and General Government proposal on Friday morning was characterized in an accompanying memo as designed to “provide funding for urgent expenses related to resolving extraordinary hardships of the COVID-19 public health emergency.”
The language of bill itself goes much further than that.
It would establish a “COVID-19 extraordinary relief fund.” Any money that winds up in the state’s coffers from any law enacted over the next year that increases tax revenue would go to this fund.
Separate language added to the Aid to Localities bill details how $3 billion of this fund can be spent.
In short, the rules are pretty broad: Cuomo’s budget director has the unilateral authority to give it to any “school districts, local governments, for profit and not-for-profit corporate entities, and/or public benefit corporations” that have experienced hardships due to the pandemic. A case could be made, presumably, that pretty much everybody has experienced some sort of a hardship.
“It is a control move,” said the Empire Center for Public Policy’s E.J. McMahon. “It’s meant to give him extraordinary control.”
“This fund will be supported by revenues generated from any new taxes to provide flexibility and ensure these new resources are targeted to support schools, local governments, not-for-profits, and other sectors hit hard by the pandemic, and we will discuss any uses and purposes with the legislature as part of the budget process,” Freeman Klopott, spokesman for the Division of the Budget, said in a statement.
The language is written in a way that, as McMahon put it, is a “throwing of the gauntlet” at the Legislature.
A series of court cases in recent decades that strengthened the governor’s dominance over the budget process made clear that legislators do not have the power to change the language of appropriations bills, the parts of the budget that lay out how money will be spent. Judges who have ruled in favor of the governor, however, have noted there’s an untested question of how policy-heavy such bills can be. Budget agreements of recent years have not provided for new tests of this question — the most significant changes have been left to the accompanying “Article VII” language bills, which are more typical changes to statute which legislators do have the power to change.
In this instance, the policy language laying out the new fund is included in the Article VII bill — the Public Protection and General Government measure. But the appropriations bill — the Aid to Localities — specifically says the $3 billion in question shall come from the fund that was created by the Article VII bill.
So the Legislature can change the Article VII bill if it has the votes to do so. But since it can’t change the appropriations bill, doing away with the fund would ensure that a $3 billion pool of money cannot be spent, as the language in that appropriations bill depends on the Article VII bill existing in its current form.
Cuomo himself has suggested a handful of measures to increase tax revenue. He wants to raise $1.5 billion through a new surcharge on high earners. He’s also suggested delaying modest tax cuts that the middle class would otherwise be due to receive this year.
Progressives have been campaigning to go much further, fighting for new taxes on the rich that they say could bring in up to $50 billion. If the language that’s in the budget amendments finds its way into the final documents, it could theoretically lead to a situation in which Cuomo has control over the revenue from any of these taxes that might manage to pass over his veto pen. That’s not exactly what advocates for the tax hikes are aiming for.
“The Governor has spent the past decade underfunding our schools, health care and housing while doling out tax cuts to the wealthiest New Yorkers,” said Invest In Our New York campaign spokesperson Monica Klein. “Clearly, an administration that is more concerned with protecting billionaires than working people should not have sole control over the revenue raised to help struggling communities.”