In this newsletter:

• Nonprofit Westchester Invests Further in Advocacy Work, Engages Mercury
• NPW Policy Meeting - May 18th
• NYS Charities Bureau Westchester Symposium - May 17th
• New York State Budget: Overview, Highlights, Key Initiatives, Press Clips

Nonprofit Westchester Invests Further in Advocacy Work, Engages Mercury

NPW’s mission to strengthen Westchester’s nonprofit organizations as they transform lives, empower communities, and drive positive change is achieved through pillars and actions that increase the visibility, capacity and impact of the nonprofit sector in Westchester.

Advocacy is a key pillar and one that the NPW will fortify in 2023 and beyond.  To this end, we are proud to announce that we have engaged Mercury.   

NPW Members: Please join us on May 18, 2023, 11:00 AM – 12:00 PM for the NPW Policy Committee meeting where we will provide an update on our campaign to advance equitable contracting with government partners. Jan Feuerstadt, Partner and Deanne Braveman, Esq. Senior Vice President, Mercury will discuss the 2024 NY State budget. Register HERE. 

See All NPW Upcoming Events HERE.

NYS Charities Bureau Westchester Symposium with Attorney General Letitia James: May 17, 1:00 - 4:30 PM

The Office of Attorney General Letitia James Presents: Charities Symposium – Doing Well While Doing Good at Westchester Community College.

NPW is pleased to welcome Attorney General Letitia James to Westchester. Register Here. 
See All NPW Upcoming Events HERE.

Overview

New York State budget negotiations concluded a month after the initial deadline with many issues remaining on-the-table for further discussion during the end of session and beyond. Contentious questions around housing, public safety, wages and standards, education, health, and energy all were precarious, complicated issues with various, multi-faceted solutions. Areas with consensus included a host of climate initiatives (a ban on some natural gas and closure of fossil fuel based peaker power plants downstate, among others), bail reform rollbacks, setting a new minimum wage (albeit not as high as advocates would have liked), and new MTA revenues. The outstanding outliers left without a solution were particularly related to housing, including just cause for evictions, multi-family zoning in historically suburban or low-density areas, as well as issues of how to perceive and solve criminal justice problems.

The continued calls for a minimum wage over $20 an hour and how to handle bail reform were critically debated for weeks past the budget deadline. The economic pressures before COVID have not only caught-up with families, nonprofit and small businesses but are now transcending the post-crisis economy into real estate, banking, corporations, transportation, tech, and nearly every other facet of life and commerce – all with implications for the nonprofit sector, the people served and the nonprofit workforce. Economic and social justice concerns of people from all walks of life were palatable in the legislative negotiations—from who will pay, what will be funded, who were ‘left out’ in the end.

Highlights

• The final enacted budget is estimated at $229 billion for State Fiscal Year (FY) 2023-24—a nearly 4% increase over the previous fiscal year and $2 billion higher than the Executive Budget proposal.
• 4% cost of living adjustment for human services workers.
• Removes the “least restrictive means” standard under the 2019 bail law and provides judges further discretion to set bail for repeat offenders and gun crime.
• $1 billion for mental health to improve insurance coverage, increase outpatient services, and inpatient psychiatric treatment capacity.
• $1 billion for health care capital funding and Medicaid expansion.
• $2.4 billion investment for new capital projects for SUNY and CUNY.
• $34.5 billion for School Aid and an additional $2.6 billion to fully fund Foundation Aid.
• $1.1 billion to fund MTA through an adjustment of the payroll mobility tax for the largest NYC businesses to 0.6 percent.
• Raise the minimum wage up to $17 by 2026 and indexing it to inflation by 2027.
• $400 million in relief for high electric bills for more than 800,000 New Yorkers making under $75,000 along with NYSERDA’s EmPower Plus home retrofits program.
• Reissue 14 “zombie” charter licenses in the New York City area.
• $1 billion to New York City in extraordinary funding to help address the ongoing migrant crisis.

Key Budget Initiatives

Housing

Housing—yet again—was one of the fiercest battles in this year's budget; both between the Governor and the legislature, and the real estate industry and housing advocates. Most agree that New York State needs more housing—a figure of 800,000 units is often cited—but how we get there is far from clear.

Governor Hochul’s proposal to increase housing stock by 3% in NYC and 1% everywhere else every 3 years ignited a conflict between her and suburban legislators located near mass transit commuting locations, primarily in the New York City region. The Governor’s top-down approach ran counter to the legislature’s approach which included millions in development incentives for communities. Other legislators supported the “Good Cause Eviction” bill which would have capped rent increases and provided strict rules for evictions. In the end, the differences were too great to overcome, and an extensive housing deal was not included in the final budget and will continue to be discussed.

• Investment in rental assistance for New York City Housing Authority and other public housing residents, as well as Section 8 voucher recipients and other subsidized housing residents through the Emergency Rental Assistance Program (ERAP). 
• $391 million in additional funding for ERAP (public and subsidized housing to be included).

Public Health and Pandemic Recovery 

Three years post-COVID, the focus on healthcare in the budget has decreased somewhat but there were still some budget fights to be had.

Human services workers will receive a 4% cost of living adjustment for eligible programs in the Office of Mental Health, office for People with Developmental Disabilities, Office of Addiction Services and Supports, Office of Temporary and Disability Assistance, Office of Children and Family Services, and the State Office for the Aging.

Federal Medicaid reimbursements, which are typically allocated to counties, will now be kept in state coffers. Safety-net hospitals, which have long relied on Medicaid reimbursements, would see a 7.5% increased reimbursement rate in this budget.  Funding of $500 million was included for the safety net hospital fund.

The 340b Medicaid program which allows hospitals and primary care providers to pay discounted prescription drug prices was scheduled to end in 2020.  It was extended during COVID and expired April 1, 2023.  The legislature, providers, healthcare unions, and advocates opposed ending this program.   On April 1, 2023 with the budget not finalized New York State implemented a new pharmacy benefit program called NYRx. Under this program Medicaid will pay pharmacy costs directly, eliminating the need for managed care organizations to administer this benefit through pharmacy benefit managers.  The Medicaid scorecard will provide additional information on how the state intends on making providers effected by the carve out whole.

Funding for a statewide healthcare facility transformation program, known as Statewide V, was provided in the budget. Funds will be available to hospitals, independent practice associations (IPAs), residential healthcare facilities, and adult care facilities among others. 

• Up to $490M of the funds appropriated for the program shall be awarded, without a competitive bid or RFP process, for grants to healthcare providers.
• Up to $500M of the funds appropriated for the program shall be awarded, without a competitive bid or RFP, for technological and telehealth transformation projects

The original Material Transactions proposal, which would have provided restrictions on third-party healthcare entity transactions with non-hospital entities, was changed in the final enacted budget. Instead of restrictions, the state has increased oversight on non-hospital entities in line with the oversight seen on hospital transactions. The following will be subject to oversight:

• A merger with a healthcare entity
• An acquisition of one or more healthcare entities
• An affiliation or contract signed between a healthcare entity and another person
• The formation of a partnership, joint venture, accountable care organization, parent organization, or management services organization for the purpose of administering contracts with health plans, third-party administrators, pharmacy benefit managers, or healthcare providers as prescribed by the commissioner by regulation

The school-based healthcare proposal, which would have designated certain healthcare entities to provide in-school health services, was omitted from the budget.

Other funding:

• $1 billion in mental health to transport the continuum of care by increasing inpatient psychiatric treatment capacity, expanding outpatient services, and boosting insurance coverage.
• $1 billion in multi-year healthcare capital funding to drive transformative investment that supports the State's healthcare investments. Expands coverage for more than 7.8 million low-income New Yorkers.
• $100.7 million to protect reproductive healthcare by funding abortion providers, expanding access for SUNY and CUNY students, providing over-the-counter contraception at pharmacies, enacting additional data protections for patients seeking reproductive healthcare, and increasing the Medicaid reimbursement rate for abortion care.
• $50 million for an expansion to vital access prover services to expand services to behavioral health
• $10.5 million to revitalize the state's Emergency Medical Services system. 

Taxes and Revenue

Elected leaders are concerned about filling the state’s coffers. Budget negotiations between the legislature and executive exposed stark differences between the two parties regarding taxing wealthy New Yorkers. The Governor’s budget plan intentionally left out income tax increases; she has publicly stated that it does not make sense for New York to increase income taxes when the state is currently implementing a multi-stage tax cut over several years. On the legislative side, there was a larger appetite for taxing high-income New Yorkers with proposed tax increases for those making over $5 million dollars. However, the taxes on the rich did not make the cut in the final budget.

Education (includes Higher Education)

In the Governor’s proposed budget, Governor Hochul put forth a record level of funding for education, including a $2.7 billion dollar increase in foundation aid compared to the last budget cycle, higher levels of capital and operating support for SUNY and CUNY, and the elimination of the regional charter school cap in New York City. The legislature echoed the Governor’s support for education, however, both houses omitted the Governor’s tutoring proposal for learning loss from the pandemic and included the establishment of a universal school meals program. With well-documented learning loss from the pandemic and concerns about student performance on standardized testing, this area of policy has been an area of interest for legislators across the spectrum.

• $34.5 billion in total School Aid funding.
• $2.6 billion added to Foundation Aid from last year—to complete Governor Hochul's three-year phase—to fully funding Foundation Aid for the first time in history.
• $2.4 billion for transformation, maintenance and preservation projects at SUNY and CUNY campuses across the state.

Energy and the Environment

The Governor and legislature both remain committed to the goals of The Climate Leadership and Community Protection Act (CLCPA), which requires New York to reduce economy-wide greenhouse gas emissions 40 percent by 2030; and voiced their support for the environmental protection initiatives, including, funding for clean water infrastructure, Environmental Bond Act funding, and a Cap-and-Invest program to replace carbon dioxide emitters with cleaner sources of energy. However, during budget negotiations, the legislature took a stronger stance on building electrification by suggesting a shorter timeline and stronger requirements for electrification. 

• Implementing zero-emission requirements for new buildings and phasing out the use of natural gas (2025 as a deadline for small buildings and 2028 as a deadline for large buildings).
• Expanding the New York Power Authority's (NYPA) ability to support New York's climate goals.
• $400 million in utility relief.
• $500 million for more clean water infrastructure.
• $400 million to advance open space initiatives.
• Authorizes NYPA to create public renewables and compete for state contracts.
• Submits NYPA’s peaker plants to a reliability review and requires that seven of these plants are closed by May 2025.

Public Safety

New Yorkers have demonstrated growing concern about the safety of their streets for years. The current political discussion surrounding public safety has mainly involved gun violence and bail reform with bail occupying the centerpiece of the debate. Bail reform has become a perennial issue in New York State politics. In New York’s budget negotiations, the Governor has pushed to remove and limit the “least restrictive means” standard in New York’s bail statute that restricts judicial discretion for setting bail. However, in both houses of the legislature remain concerned about the disparate impact that cash bail has on communities of color and the implications of pretrial detention on the presumption of innocence for defendants. Additionally, the Governor’s Executive budget included funds for combating gun violence in vulnerable communities from a prevention, enforcement, and victim-based perspective.

• Removes the requirement that judges choose the “least restrictive” means to ensure defendants return to court.
• $170 million for discovery law implementation and $50 million for related technology improvements.
• $347 million in evidence-based gun violence prevention initiatives.
• $92 million in aid for prosecution and defense funding across the state.
• Over $66 million to increase the number of State Police academy classes and number of troopers dedicated to addressing serious crime.
• Expanding the enforcement powers of the Office of Cannabis Management and Department of Taxation and Finance to further grow the legal marketplace for cannabis, including levying fines on illegal retail operations and closing those shops down.
• Replaces the Waterfront Commission of New York Harbor with an executive regulatory agency intended to police the New York Harbor after the Supreme Court of the United States held that New Jersey could unilaterally withdraw from a bilateral enforcement agreement.

Business and Economic Development

Investor panic, price volatility, and rising interest rates all contribute to New York’s uncertain economic future. The recent runs on banks in Silicon Valley and the dramatic fallout of cryptocurrency giants, like FTX Trading Ltd. (FTX), exposed major weaknesses in our national economy that some economists suggest are canaries in the coalmine for what New Yorkers may face in near future. In the face of uncertainty, New York’s Governor and legislature aimed to use the New York’s budget to stimulate economic growth and job creation while protecting workers’ wages through tax credits and jobs and investment programs.

• Indexing the minimum wage—which varies by region—to inflation after three years of wage increases for workers.
• Expanding the New York Film Tax Credit up to 30% of the qualified production.
• Creates New York Youth Jobs Connector Program to train, educate, and connect young people to career opportunities.
• Establishes the Small Business and Grant Entrepreneurs Program to award grants of up to $25,000 to start small businesses.

Transportation

With the MTA facing a $600 million budget gap that could grow to $3 billion by 2025, making the MTA financially stable was a priority all parties during this budget negotiation. The Governor’s initial budget included an increased payroll tax on businesses in regions served by the MTA which officials have said would provide “financial stability through 2026 and beyond.”

However, the legislature opposed the increase, suggesting alternatives including residential parking permits to make up for the deficit. The final budget agreement was a compromise, with NYC businesses paying the tax and non-city regions exempt.

• Increasing the Payroll Mobility Tax for the largest businesses within New York City to 0.6 percent (estimated to generate approximately $1.1 billion).
• $300 million in one-time State aid; requiring New York City to contribute.
• $165 million for paratransit services funding.
• $65 million to reduce the proposed fare increase on the MTA.
• Launching a pilot program providing five free bus routes in New York City.

Childcare

Senate Democrats supported allocating $500 million for childcare initiatives in their March one-house budget which would increase child-care worker salaries up to $12,000 annually. With staffing issues and low pay, New York State has struggled to fill child-care vacancies, particularly in marginalized communities. The Governor’s long-term plan includes $7.6 billion over the next four years but it’s unclear how and when that money will be made available. Nevertheless, tax credits and workforce retention dollars were the agreed upon to address childcare for this budget cycle.

• $25 million for the Child Care Creation and Expansion Tax Credit Program Act for 2023-2024 and an expansion to include children under four years old.
• $500 million towards a Workforce Retention Grant Program.

Press Clips

Bloomberg: Hochul’s $229 Billion New York Budget Deal Boosts Wages, Taxes, April 28, 2023

New York Governor Kathy Hochul announced late Thursday a “conceptual agreement” on a $229 billion state budget after nearly a month of stalemate.

Under the new plan the governor reached with the legislative leaders, the minimum wage will be raised to $16 an hour in New York City in 2024, the payroll taxes on the city’s businesses will be increased to pay for the Metropolitan Transportation Authority’s budget deficits and the state’s controversial bail reform laws will be revised.

Gothamist: NY has a tentative state budget deal. Here’s what’s in and what’s out., April 27, 2023

New York Gov. Kathy Hochul said she reached a tentative deal with lawmakers on a state budget that will increase the minimum wage, bail out the cash-strapped Metropolitan Transportation Authority and clear the way for more charter schools in New York City.

After months of negotiations and five separate extensions, the Democratic governor and the Democrat-controlled Legislature agreed to a “conceptual” deal on a $229 billion spending plan that, once passed, will be more than four weeks late. It will also include a number of policy measures that have little to do with money — some of which stalled negotiations for weeks, including one making it easier for judges to set bail in serious criminal cases.

Spectrum News Syracuse: New York budget deal includes bail changes, minimum wage increases and school meals, April 27, 2023

Nearly a month after its initial due date, New York state lawmakers and Gov. Kathy Hochul have agreed to a $229 billion state spending plan that will make changes to a controversial bail law, boost direct aid to schools by billions of dollars and keep personal income tax rates the same.

"A conceptual agreement has been reached," Hochul said at a press conference Thursday evening.

City & State: What made it into the 2024 New York budget?, May 1, 2023

After blowing past the April 1 original state budget deadline and weeks of closed-door budget negotiations, amended budget bills finally began to get introduced Sunday evening and Monday morning, marking the official beginning of the end of budget season. The new language comes following Gov. Kathy Hochul’s unveiling of a “conceptual agreement” on the fiscal year 2024 state budget during a surprise press conference last week. Among the policy issues settled are bail reform rollbacks, expansion of charter schools in New York City and an increase in the payroll mobility tax on big businesses in New York City to help the financially strained MTA. 

Here’s a guide to help navigate the biggest sticking points in the state budget and whether or not they’ve been included. 

The New York Times: New York Officials Failed to Address the Housing Crisis. Now What?, April 27, 2023

It seemed like 2023 would be the year that New York would finally take the most consequential steps in decades to address the state’s dire housing shortage.

Rising rents and homelessness had made housing a top issue for voters. Gov. Kathy Hochul had unveiled a grand plan, focused on cajoling communities to build more homes through new mandates, that was met with praise from housing experts and pro-development groups. And her fellow Democrats in control of the State Capitol had pledged to make housing a priority.

Prepared by Mercury, a high-stakes public strategy firm, providing results for the world’s most successful companies, leading advocacy groups, governments, political parties, NGOs, and prominent public and political figures.

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