ALBANY – On the day after Andrew Cuomo announced he would be resigning from office, Gov. Kathy Hochul talked of working “with our partners in every level of government” to devise solutions for the problems facing New York.
In the months since, she has boasted of a new, collaborative spirit with local governments across the state, of understanding the problems they face – especially during the pandemic – the need for their voices to be heard better in Albany and how she has traveled to every one of the 62 counties each year for seven years in her previous job as lieutenant governor.
The governor proposed a total spending plan of $216.3 billion, up from the $208.9 billion budget enacted last April, and it includes enormous increases in education and health care.
This week, in unveiling her first state budget plan, the Democratic governor put taxpayer dollars behind the partnership rhetoric, proposing to spend huge new amounts of money on all levels of local governments, from schools to counties, cities, towns and villages.
The jump in overall spending in the Hochul plan includes much money that will benefit localities, including more funding for road and bridge repairs; includes a $1 billion multi-year program aimed specifically at fixing potholes; includes new environmental spending that will result in new infrastructure work locally and expands improvement works projects in more communities; boosts state aid for strained local public health agencies; and adds money to lure more doctors to underserved areas.
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The reaction by local governments in the days after the Hochul budget was released was unusual, particularly given the ongoing tussles – and, they said, lack of respect – shown by Cuomo toward the units of government that are down the food chain from Albany but still are responsible for so many direct public services.
Gov. Kathy Hochul's schools plan includes a $2.1 billion increase in aid that translates to a 7.1% increase, for a record total of $31.3 billion in aid to education.
“The executive budget is a positive and nearly seismic shift in the state’s approach to local governments. Budgets, not words, establish a leader’s true priorities, and the governor’s budget treats local governments as true partners in making New York work for its residents and businesses," said Peter Baynes, executive director of the New York State Conference of Mayors and Municipal Officials, which represents cities and villages that are home to 12 million of New York State’s residents.
“It’s a good budget for all New Yorkers," said Peter Anderson, a spokesman for Erie County Executive Mark Poloncarz, who met privately Wednesday night for dinner with Hochul and some other county executives at the governor’s mansion in Albany to discuss the budget proposal.
Schools, seeing an overall aid increase of $2.1 billion, or more than 7% from last year, are among the biggest local government winners in the Hochul budget.
But beyond the 700 school districts, cities, towns, villages and counties had their own major victories – and a few setbacks or proposals that raised concerns and are still being studied by local government fiscal experts.
Among the victories:
More than one-third of districts in Erie and Niagara counties would receive overall increases of 10% or more, with the average increase at 9% over what they received this year.
• An increase in an assortment of road and bridge programs, which typically get held flat by governors when they propose budgets, leaving lawmakers to scramble to get more money in the final budget deal. Hochul is proposing a $32.8 billion, five-year capital transportation program administered by the state, as well as extra discretionary funding for localities to work on roads, bridges, sidewalks and other projects.
• $1.8 billion in a variety of new economic and community development funding, including a new one called New York Forward to support projects in rural communities.
• Updating a tax law to make all vacation rentals subject to state and local tax charges, worth up to $9 million in additional sales tax receipts this year for localities.
• Making permanent local sales tax levels at four percent, or higher if already set by a locality, thereby ending the lobbying task that counties had to engage in every two years with governors and lawmakers to maintain their tax levels. It’s been a long-time ask by Democratic and Republican county leaders for years.
• Adding money for county veterans programs, extra funding to battle the opioid crisis, a five year commitment for state funds do continue doing wastewater surveillance for signs of Covid-19, continuing a cap on local Medicaid costs and reducing interest costs on court judgments against localities that are awaiting appeals from the current nine percent level to a variable interest rate system.
• Bringing back to life the New York Communities Program, providing $250 million for municipalities to demolish or rehabilitate vacant or condemned properties that serve as a blight in many communities.
"One hard lesson we learned about what happens when there's a lack of investment is how our health care system crumbled under the stress of the pandemic," Gov. Kathy Hochul said.
Localities would also benefit from Hochul’s plans for a $4 billion “Clean Water, Clean Air and Green Jobs Environmental Bond Act” that she seeks to get lawmakers to approve. It would also need voters’ approval this fall. The budget also seeks adding $500 million for clean water infrastructure projects and adds $400 million to the Environmental Protection Fund administered by the state.
All this extra money comes as several things are happening. For starters, Hochul is running for election this year, and, as one lobbyist said, “This is a good political budget.” Also, the state is flush with money, driven by billions from Washington in special Covid-19 relief aid, higher-than-expected tax revenues and tax receipts flowing from a big state income surcharge imposed on wealthy people last year.
Beyond the extra funding for many local programs, officials noted the sea change in attitude by Hochul in both her funding vows for localities and her more cooperative tone than they’ve been seeing from Albany over the years.
“Governor Hochul’s budget is a welcome change in tone and process that incorporates many of the concerns, needs and policy ideas raised by local leaders," said Marte Sauerbrey, a Republican, president of the bipartisan New York State Association of Counties and chairwoman of the Tioga County Legislature, which puts her in charge of the day-to-day running of the county.
Sauerbrey noted that Hochul is also including money to expand broadband connections, train workers and give a variety of aid to businesses in local communities, including new tax breaks.
In her State of the State address, Gov. Kathy Hochul outlined a plan to spend $10 billion to bolster health care through a variety of broad initiatives. Labor unions and health care associations are optimistic but are awaiting further details on the bold proposals.
“Overall, this is one of the most favorable Executive budgets for local governments in several years," said Gerald Geist, executive director of the Association of Towns of the State of New York, which represents 932 towns in size from Red House (population: about 35) in Cattaraugus County to Nassau County’s Hempstead, with a population of about 770,000 people.
“Rather than pitting local governments against each other or creating a top-down approach, Governor Hochul’s budget exhibits a willingness to work together with towns in order to provide the best services to New Yorkers," he added.
Not that localities don’t want improvements to the Hochul plan. While they support her plan to improve how Albany funds the main state aid program for localities – called Aid and Incentives for Municipalities – officials note the program still hasn’t gotten a funding bump in 13 years. It would take about $200 million in additional state aid just to make up for inflation since the last funding hike to AIM.
Hochul also wants to continue intercepting some local sales tax revenues to help pay for a state funding pool for financially distressed hospitals and add extra local costs for preschool special education. Local officials are also still evaluating Hochul’s plan for changing ethics requirements for local officials.
“But on the whole, this is a budget that will help us strengthen our communities after two years of the Covid pandemic," said Sauerbrey.
