March Madness

Good morning from Albany, New York, where we eagerly await the release of the Senate and Assembly respective One-House budgets later today?(or perhaps?early tomorrow), with votes slated for Thursday?(or Friday as the timing dictates).?That will leave less than three weeks for negotiations before the March 31st?deadline for an on-time budget.

More to come on these details, but one to watch is the proposal?from Governor Kathy Hochul to send $300-$500 “inflation rebate” checks to New Yorkers. Many Democrats in the Legislature would rather see that $3 billion invested elsewhere. Nonetheless, reports are that Assembly Speaker Carl Heastie will include a version of the plan in the Assembly One-House proposal. Whither the Senate?

One of the major items omitted from the Executive Budget is funding for the Metropolitan Transportation Authority. Hochul put the ball in the Legislature’s court after Heastie and Senate Majority Leader Andrea Stewart-Cousins vetoed the MTA’s 2025-2029 Capital Plan, offering this at the time: “Now that the Legislature has raised these objections to the capital plan, we look forward to seeing their recommendations on which of those projects should be deprioritized and which revenue streams they are willing to propose.”

The MTA’s capital plan is facing a $33 billion shortfall before factoring in the uncertainty around congestion pricing, and Heastie conceded there are not many options to make up that revenue, offering, “Usually there are very few ways to raise revenue, fees, and taxes, but we're not there yet. I’m not saying we’re raising taxes to fund the MTA. I’m not prepared to say that.” Will they include any specific proposals or simply broad language supporting the plan and kick the issue to later negotiations? Whatever lawmakers decide on the MTA will have an impact beyond New York City, as Upstate Transit Authorities—and their representatives in the Legislature—are pushing for a dedicated revenue stream as well as a 15% increase in state operating assistance.?

On healthcare, the proposed Managed Care Organization Tax will generate $3.7 billion in revenue over the next two fiscal years, and the Community Health Centers and other Community-Based Organizations across the State have been pushing for a greater share of the revenue. Currently, community health centers receive $10 million state share. They are pushing for a $65 million increase for a $75 million total, while substance use providers and other CBOs are also pushing to be included. We will have to wait and see how the Senate and Assembly address the breakdown of revenues.

The legislature is also expected to propose a higher cost-of-living (COLA) adjustment for human service providers compared to the 2.1% increase proposed by Hochul, though likely not the full 7.8% being pushed by providers. One very contentious item that will not be in One-House budgets is a delay on the implementation of a single fiscal intermediary, Public Partnerships LLC (PPL), to administer the state’s Consumer Directed Personal Assistance Program (CDPAP). Advocates and some lawmakers have mounted intense opposition to the single FI and worry the change will lead to a disruption of services for some of the 280,000 disabled and elderly New Yorkers who rely on the $9 billion Medicaid home care program. Heastie acknowledged that more can be done to compel companies to share data with PPL to ensure a smoother transition, but said a delay is not the answer, offering, “I’m not in support of a delay. You’re always going to have some tough spots when you make a huge change like this… but on March 5, I’m not willing to entertain (a delay) at this point.”?

Expect additional proposals on climate and energy after Hochul seemingly balked at a number of climate-related initiatives in her budget, including programmatic guidelines for the state’s ‘cap and invest’ plan (though her administration says ‘cap and invest’ details are coming soon). If lawmakers lose faith in Hochul’s ability to implement the program, they could again propose a “millionaires tax” on high-income residents to generate the revenue to fund clean energy projects that were expected from the cap and invest program. The HEAT Act, meant to catalyze the state’s transition away from natural gas, has been included in the Senate’s proposal in past years, but has failed to gain traction in the Assembly. Extended producer responsibility will also likely appear.?

Lots more to come. Stay tuned for a full analysis next Monday!

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As the New York State corrections officers’ strike enters its fourth week, the stakes continue to rise while the path to a resolution becomes murkier. The New York State Correction Officers and Police Benevolent Association (NYSCOPBA) and the state Department of Corrections and Community Supervision (DOCCS) reached a consent agreement last week, but the changes were not enough for many corrections officers who remain on strike. For those officers who did not return to work by the March 3rd deadline laid out in the consent agreement, NYS Homeland Security and Emergency Services Commissioner Jackie Bray said, “We will be terminating health insurance for corrections officers who have been AWOL, along with their dependents. None of these actions we take lightly.” The strike has laid bare the tension between not only the officers and the state, but also with their own union leadership. NYSCOPBA Executive Vice President Matt Keough said, “They want the repeal of HALT. They want the complete repeal of HALT. And we can’t provide that for them, so that’s where our failure came in their eyes. We can’t repeal HALT, so the union is failing them.”?

Hundreds of corrections officers rallied in Albany last week as a show of force, but Governor Kathy Hochul was apparently unmoved, offering, “This is a wild, illegal, unauthorized strike. All the screaming and yelling here will have no effect on me. I know what I have to do, and they should be getting back to work. There are serious consequences. We have warned them day after day after day, you will lose your health care. You will be arrested, you could be going to jail. You’ve lost your job, you’ve lost your income, you’ve lost everything.” Hochul cited the “dangerous situation” created by officers walking off the job, which required the state to deploy the National Guard to address staffing shortages, and another high-profile inmate death last week will not make things any easier.?

DOCCS had negotiated a deal with a group of corrections officers directly that led to some members returning to work on Friday, but the agreement was not signed by NYSCOPBA, which argues they are the only body with the legal authority to negotiate on behalf of COs. Late Saturday, NYSCOPBA finally got behind a similar agreement that would see the strike end today if 85 percent of guards return to work. Some of the key provisions included in the latest version are the reinstating of healthcare back to the first date of absence, a temporary suspension of the HALT Act, and an agreement to eliminate 24-hour mandatory overtime.?

In Washington, D.C., President Donald Trump delivered his address to a joint session of Congress last week. Coming in at just under 100 minutes, it was the longest address to a joint session of Congress in modern history. Trump boasted about the breakneck pace at which his administration is moving since taking office just seven weeks ago and did not hold back on his pointed criticisms of former President Joe Biden and Democrats more broadly.

Trump promised to usher in a “common sense revolution" with “swift and unrelenting action” in the form of tariffs, cuts to the federal workforce, and immigration restrictions. For the most part, Democrats heeded the advice from leadership to behave, but that did not stop some members from color coordinating, utilizing props, and even temporarily disrupting the proceedings. (Leadership was not happy.) While Trump spent plenty of time on culture war issues, his speech was devoid of any real details for funding the government and avoiding a shutdown before Friday’s deadline.

To reiterate, there is a deadline this Friday, March 14th, to keep the government funded. House Republicans are pursuing a continuing resolution (CR) to keep defense and non-defense spending flat through September to give themselves breathing room to advance Trump’s policy priorities over the coming months. Trump is helping to whip support for the plan, meeting with members of the House Freedom Caucus at the White House last week and posting on social media, “Conservatives will love this Bill. Let's get this Bill done!” In past years, a narrow GOP majority and a handful of hardline conservatives opposed to temporary funding patches have caused Republicans to rely on Democrats to avoid a shutdown, but that does not appear to be an option this time around. Meanwhile, those appropriators are close to an agreement on “topline” spending numbers, which clears the way for negotiations to begin in earnest over new spending totals, but Speaker Johnson and other GOP leaders are set on a CR, offering, "I’m counting on the full-year CR. I think that’s the only plan that works.” For those of us in the rest of the world, a full-year CR goes through the end of September, the close of the federal fiscal year.

If House Speaker Mike Johnson cannot get all his members on board with the September extension, he will be forced to pursue a shorter-term CR while House appropriators continue working toward bipartisan funding bills that update spending levels. Johnson (R-La.) on Friday said that he intends to put a “clean” continuing resolution up for a vote early next week—a move Minority Leader Jeffries blasted as “unacceptable.”

“We are putting a clean CR on the floor early next week, probably on Tuesday,” Johnson told Fox News. “It will fund the government at current levels because that will allow us, as we said earlier, to make sure all the cuts and all the new innovations are calculated so we can actually use them in the federal budgeting.” That means he intends to include the codification of cuts ordered by the Department of Government Efficiency (DOGE). Democrats are having none of it, demanding guardrails to prevent President Trump and DOGE chief Elon Musk from slashing congressionally approved spending.

Here is Jeffries’s “Dear Colleague” letter trying to connect those DOGE cuts and threats to Medicaid to tax cuts.??

This is going to be messy.

At the same time, House Republicans are aiming to have their budget bill with an extension of the 2017 tax cuts on Trump’s desk by Memorial Day. That abbreviated timeline will require Senate Republicans to quickly get on board with the House plan, even though some senior senators would still prefer a two-bill approach that deals with the border and energy policy first before turning to taxes. Commenting on the perils of the Senate plan, House Ways and Means Chair Jason Smith (R-Mo.) said, “If you can eat dessert first, you’re not going to eat the broccoli later. And so some of my members of this conference, if you just give them border and energy first, they’re not gonna eat the broccoli.” Senate Majority Leader John Thune does not feel the same sense of urgency as Smith, telling his colleagues he does not intend to bring the House budget plan to the floor for a vote until after the Senate’s mid-March break.

Farewell to George Lowe, the unmistakable voice of Space Ghost, who passed away last week at the age of 67.?Two of my favorites: Batmanis and Banjo.

Finally. . . Someone is standing up for the penny! (Wait until folks figure out how much it costs to make a nickel. . .)

-Jack O’Donnell