5 Things You Need to Know About New York’s Film Tax Credit

What movie is the biggest flop of all time? Ishtar, Heaven’s Gate or for you younger Bennifer fans, Gigli – all big budget disasters. They’re fun to talk about and even debate, when it’s not your money! Unfortunately, over the past 20 years New York taxpayers have been on the hook for financing more and more movies and television series in the name of “jobs” – many Teamster jobs – to the tune of almost $7 billion dollars. Now, Governor Hochul has proposed to spend even more.

In her Executive Budget, Governor Hochul has proposed to dramatically expand New York’s film tax credit by over 60% to a whopping $700 million annually. Established in 2004, I know because I helped to create the program, it has grown from an annual appropriation of $25 million to a massive $420 million today. With so much need around the state, does a $700 million handout to the entertainment industry make sense?

On one hand, New York is a tax and regulatory hell and almost every business sector can make a compelling case that in order to compete effectively, state assistance is needed. But why this industry as opposed to others? How does it work? Why this much? 

Here are five things that you need to know about the film tax credit.

1. The film tax credit is refundable, which means once a production has gone beyond its tax liability the state actually sends a check for the balance of the credit. The vast majority of tax credits doled out by states and the federal government are not refundable, which means this tax credit actually costs taxpayers real money. When Albany talks about what it can afford and can’t afford, remember while it’s called a tax credit, $700 million in real $$$ are planned to support film and television series.

2. The administration’s proposal, for the very first time since the inception of the program, would make what are known as above the line costs, the salaries of actors, directors and writers, eligible for taxpayer funding.  That’s right, under the Governor’s plan taxpayers will now be on the hook to help pay the salaries of Tom Cruise, Gwenyth Paltrow, Alec Baldwin, Rosie O’Donnell, Steven Speilberg, Aaron Sorkin etc. As much as I love Blue Bloods and Tom Selleck, and deep down wish Frank Reagan was actually running New York City, we don’t need to pay his salary.

3. It was once said to me that “politics is show business for ugly people.” Think about what so many actors and politicians have in common – the ego, the narcissism, the performance and self promotion. George Santos is the personification of the thin line between reality and fiction. At the very least, it seems most every politician, upstate and down, has been bamboozled by the bright lights, craft services table (free food) and other trappings of a movie set. Speaker Heastie himself recently endorsed the effectiveness of the program, just after sitting in the director’s chair on the set of the Equalizer.  Now, notwithstanding the fact that after Tom Selleck, Queen Latifah’s badass Robin McCall, is the next person I wish was running New York City, it would take more than a few minutes with the Queen to convince me this level of spending is a good deal for New Yorkers.

4. Disagreement about effectiveness – Like most every economic development program, there is vast disagreement about the effectiveness of film tax credits. In New York, organizations such as the Citizens Budget Commission, the Empire Center and Reinvent Albany have rallied against the credit as excessive. A 2019 study by the University of California analyzed the five largest state motion picture incentive programs — in New York, Louisiana, Georgia, Connecticut and Massachusetts. It found that despite nearly $10 billion in spending since 2002, the incentives have for the most part had “no statistically significant effects” on employment. There are many other studies that reach similar conclusions.But for every study against, there is a study in favor. For example, a 2022 study by the management consultant Kearney concluded that incentives are “adding value across economies, generating a multiplier effect that includes both indirect and induced economic impacts.” And check on most every state with a robust film tax credit program and they will have posted their own study from a credentialed consultant boasting about the amazing economic impact of their program. The thing about economic development incentives is that when they work, they are supposed to build lasting capacity. The film industry in New York has added significant capacity in sound stages, production and post production facilities and a talented workforce – the program has worked in that regard and yet the price tag continues to go up.

5. The Big Media-Political Complex – President Dwight Eisenhower in his farewell address famously warned America of the influence of the military-industrial complex.  Eisenhower believed the military-industrial complex would ultimately distort every US political institution and even threaten democracy itself.  I believe the same can be said today about the relationship between government and the media. The media – traditional and new – has an outsized role in sorting out the winners and the losers, giving air to new ideas – suffocating others, creating heroes and tearing them down. This is not new in and of itself, what is new is the economic interdependence, real and perceived from the application of such significant public resources such as the film credit. Think about it…while not all films, TV shows or production studios are owned by media giants – most are. Comcast owns NBC Universal. ABC is owned by the Disney Corporation. CBS is owned by Paramount. AT&T until recently owned CNN. Fox is owned by News Corp. Each and every one of these parent companies, or a subsidiary, are beneficiaries of the state’s generous film tax incentives. I would suggest the relationship distorts the coverage of news and the marketplace of ideas sometimes in subtle and other times in not so subtle ways. Tax credits are the most obvious expression of that relationship but there are others. There has been a lot of discussion lately about new media, Facebook and Twitter and how they choose to amplify or silence messages or messengers.  In some ways what they do is much simpler to quantify and deconstruct. This growing economic reliance by the media, old and new, on government and politicians creates a distortion field in the marketplace of ideas.  Now take this dynamic and juice it with big campaign contributions and sophisticated lobbying efforts and that distortion becomes even greater. 

In my view, New York simply cannot afford to keep up this pace of spending growth. The film tax credit has morphed into “The Blob”, consuming more and more of the state budget. There are real needs that could be addressed with these funds – hungry kids, a broken foster care system, people suffering from mental health and drug abuse. I would love to see one of those activist actors, the ones who preach to the rest of the world about saving the planet or some other cause, to come out and say enough, this is a waste. I’m not holding my breath.

Finally, the interdependence of big media and the political class, perceived and real, is feeding the already troubling distrust by the public in both our government and our news. No one believes what they hear in the news and everyone expects their politicians to lie to them. Expanding the film tax credit will only make it worse.

3 Reasons Why the Chief Judge of NY Matters to You.

This week, in an unprecedented action, Governor Hochul’s nominee to serve as Chief Judge of the Court of Appeals, Hector LaSalle, was rejected by a 10-9 vote of the Senate Judiciary committee. This episode is an embarrassment to Governor Hochul and has set up what could be a constitutional showdown between the Executive and the Senate, but many might wonder why does it matter to me?

Most people might not remember but it wasn’t all that long ago that judges on New York’s highest court, the Court of Appeals, were elected.

In 1977 a constitutional amendment was passed, with an aim toward promoting judges to our highest court based less on politics and more on merit. A process was established to create a bipartisan judicial screening committee to evaluate candidates, determine which deserve the designation “well-qualified,” and narrow the list of well-qualified candidates to a maximum of seven. This list of seven is sent to the Governor, who can only nominate one candidate from it. In the 45 years since enactment, there has not been a single candidate nominated by the Governor who wasn’t considered and ultimately confirmed by the entire Senate…until this week.

In a generation and a half, New York has evolved from a state that popularly elected judges to its highest court, with millions of voters weighing in, to today, where a cabal of only 10 progressive and left wing zealots are deciding who should have the ultimate authority in interpreting and applying state law for all New Yorkers. If this stands, the reforms of the 1977 Constitutional amendment are effectively undone, merit advancement is out, politics are back in.

So why should Hector LaSalle, nominee to serve as Chief Judge of New York matter to you?

1. IDEOLOGY OVER THE LAW: The Democrat controlled Senate has created litmus tests on a host of issues, demanding future judges pay fealty to their woke agenda, whether there is a legal basis for it or not. This could have a huge impact on future rulings on issues ranging from criminal justice to climate legislation to Second Amendment rights.  Progressive Democrats are trying to hijack New York’s top court. What they can’t win at the ballot booth, they are aiming to win with liberal activist courts.

2. REDISTRICTING REVENGE & REDUX: While much of the Senate’s pushback has been publicly framed on LaSalle’s history of rulings, the political reality is that the leadership of the Democratic Senate is focused on avenging their embarrassing redistricting debacle. They are furious that the State’s highest court, composed entirely of Democrats, upheld lower court rulings dismantling their unconstitutional efforts to gerrymander legislative and congressional seats for the next decade.  Rumors abound that with the “right” Chief Judge a legal challenge will be brought in an effort to redraw maps yet again before the 2024 elections.

3. COURT PACKING: Most judge’s in New York are elected, but the state’s highest court is not the only court where judges are appointed. The Court of Claims, which hears cases against the State of New York, are appointed by the Governor and confirmed by the Senate. During the past week, the Senate judiciary chairman announced that he would not support any judge that has ever been cross endorsed by the Conservative Party.  This is a huge break with precedent and calls into question the future appointment of Court of Claims judges. 

New York is already spiraling into an abyss with more people leaving the state than ever. This action by the far left is an effort to gain control over the judiciary and cement into place their dangerous policies. As one of the strongest constitutional executives in America, Governor Hochul has the tools to fight this battle. The Republicans in the Senate, also clearly have standing to challenge these actions in court. The question is who will fight and at what cost.

For an excellent primer on the underlying Constitutional and legal issues of this matter, I highly recommend reading former Judge and Counsel to the Governor, Jim McGuire’s, attached letter.

“Now Imagine She’s White”

Blog Post

For those of you who are movie fans you probably recall the title of this post as the last line from attorney Jake Brigance’s closing argument in John Grisham’s “Time to Kill”. Jake’s powerful summation describes the brutal rape of a 10-year-old girl by two white men and the subsequent murder of those men by the girl’s father, Carl Lee Hailey, who is black. Jake asks the jury, who is all white, to imagine themselves in Carl Lee’s shoes and to consider what they would do if their own child had been brutally assaulted.

Jake says, “Now imagine she’s white,” in order to force the jurors to confront their own prejudices and to see the case from a different perspective.

We had our own brazen prejudiced episode in Albany recently an incident worthy of the Grisham treatment. Democrat pro-mayhem lawmakers were so afraid of hearing criticisms of their dangerous criminal justice laws from a black district attorney, David Soares, they actually disinvited him and replaced him with a very white DA, Washington County’s, Tony Jordan.  
 

Yes that’s right, our state legislators silenced a black District Attorney so that they would only hear criticisms of bail reform from a white man who they felt at ease dismissing. Unlike Jake, they didn’t want to confront prejudice, they wanted to reinforce it and in doing so attempt to delegitimize concerns.

Now, I’m so bored of whataboutisms these days, that I’ll ignore the obvious double standard of “if a Republican disinvited a black DA from testifying because of their race.” I’ll ignore the fact that there was no uproar among fellow Democrats at this obscene action. I’ll ignore the fact that no one took responsibility, no one was fired and no one even apologized. Instead, I’ll focus on the substance of Soares’ testimony.

First, for context, a little about Albany County District Attorney David Soares. Soares was elected in 2004, after upsetting incumbent Paul Clyne in a primary.  Clyne, who had succeeded an Albany legend Sol Greenberg, was an old school Democrat who was a reliable and known quantity to state leaders. Soares, supported by the then fledgling Working Families Party, ran as a reform-minded candidate, focusing on issues such as police misconduct, the war on drugs, and the death penalty.

At the time, there was much concern that Soares’ election could wreak political havoc as the Albany County District Attorney has jurisdiction over corruption in state government. The Albany DA had historically been hands off on the shenanigans that happened across the street at the Capitol. As a Republican who worked for then Governor George Pataki, there was a heightened concern that an activist liberal DA, like Soares, could tie up the administration in needless and unwarranted politically motivated investigations. 

None of this ever came to pass. For 18 years, Soares has assiduously avoided taking on corruption at the State Capitol. Even in the midst of Andrew Cuomo’s dramatic fall, Soares worked hard to stay soberly detached and never joined the political feeding frenzy.  Like it, hate it, unless left with no choice, David Soares has been consistent, he has rarely played the Albany game.

But, over the past two years David Soares has been surprisingly and consistently outspoken about his concerns over Albany’s so-called criminal justice reforms. Surprising given his Working Family roots and also in the sense that Soares over the years had been criticized in some circles for being soft on drug crimes. It is clear though that Soares experiences up close what all of us can see if you spend any time in Albany and you understand why he is so concerned about violent crime in his city. This has rankled pro mayhem Democrats, who likely consider him a traitor and are used to having opponents from their own party simply cower in acquiescence.
 

Soares isn’t just black, he ostensibly shares the pro-mayhem advocates political philosophy which makes his criticisms that much more stinging. 

Now, I have read David Soares’ testimony several times. It’s very good, clear, direct and I encourage you to read it in its entirety, but there is nothing new, or extraordinary in the issues he raises. It would seem in the eyes of pro-mayhem Democrats in the State Legislature, the only thing extraordinary is the color of David Soares’ skin. 

But lest we allow ourselves to get distracted by the sheer audaciousness of the prejudice shown by pro-mayhem Democrat legislators, let me share a few highlights from Soares’ testimony.

So Called Reforms are Hurting Black and Brown Communities the Most

“What you may not have heard before is a hard truth: that these reforms have had their most devastating impact on Black and Brown Communities. If you take an honest look at the data— he increases in crime, the victims of those crimes, and the location of the most violent crimes, the connection is quite clear.”

Recidivism Numbers are Egregiously Undercounted

“However, even these numbers undercount the full scope of recidivism.  They do not count re-arrests during the time between plea and sentence, which can run for weeks or months.  They only count one re-arrest, so if a defendant gets re-arrested four times while out on bail, it only counts in DCJS stats as one arrest. The implicit assumption in all of this, that a career criminal is arrested every time they commit a crime, is naïve to say the least.  

In the mind of someone who is determined to break the law, the ability to repeat offenses over a short period of time with minimal repercussions, serves only to incentivize such behavior.”

Raise the Age has Created a Turnstile of Youthful Offenders

“Speaking of incentivizing behavior with the removal of consequences, the impact of Raise the Age has been comparably detrimental to public safety. 

Since the implementation of Raise the Age, Albany County has seen approximately 312 Raise the Age cases, involving only 230 defendants. I only say approximately because these numbers can change on a day-to-day basis.” 

34 percent of those defendants have been arrested more than once. 19 percent of those re-arrested were detained as minors. Of those re-arrested, 62% were re-arrested for a violent felony. “

Bail Reform

“Back to the bail reform law, we should also look at the literal wording of the law, specifically, the words “Least Restrictive”. These two words from the Bail Elimination Act are specifically referenced by judges when making a determination on bail. That standard often leads to a demonstrably dangerous person being returned to the same environment and community in which they committed their crimes.  This helps neither the community nor the offender.”

Soares’ Conclusion

“We understand the complicated nature of social determinants of crime, and agree that those should also be prioritized. HOWEVER, pretending that accountability, and the immobilization of criminals isn’t a critical part of public safety, is akin to pretending the Earth is flat. Just because your echo chamber repeats it, doesn’t make it true.”

In his testimony, Albany County District Attorney David Soares lays out the damage being done to public safety emphatically, not blind to the impact on race, but accounting for it. Why are the vast majority of other Democrats not brave enough to stand up and say the Earth is not flat?

Can you see him? Can you hear him? Do you understand him?

Now imagine the color of his skin doesn’t matter.

Jobs Growing Like Weed?

Reefer madness gripped upstate New York last week with the opening of its first “legal” dispensary in downtown Binghamton. Legal weed even healed the deep divide between Democrats and Republicans as Governor Hochul and Mayor Kraham shared a fattie and joined hands to celebrate this momentous achievement. When the smoke cleared, the opening was hailed for the economic impact it would have on downtown Binghamton, as hard a hit downtown as any in upstate New York. 

For a state that has spent probably over a billion dollars on smoking cessation campaigns over the years, it is a little jarring to see its chief elected official actually promoting and celebrating smoking…anything.  Yes, I am aware of edibles, but c’mon the name of the store is “Just Breathe” it’s not just “Just Chew.” And it is more than just a little hypocritical that at the exact same time the Governor is celebrating one kind of smoking, she is proposing to completely ban another kind. Apparently, smoking menthol cigarettes is way, way more dangerous than smoking weed. Who knew?

More concerning to me is the harebrained, albeit widely accepted notion that the opening of a weed shop somehow counts as real economic development. Leading me to wonder, what is the real economic impact of one pot shop?

Now look, I give immense credit to any entrepreneur that manages to open a business in New York State and that includes the folks who opened the shop in Binghamton, and I sincerely mean that. In fact, the red tape and regulations around opening a legal dispensary are even more onerous than one can imagine, which is probably why the vast majority of the retail establishments in New York are actually illegal. There are so many illegal weed retailers operating in plain view in New York City that Mayor Adams has begged the state to take enforcement action. Two years after the enactment of weed for sale, Just Breathe is the very first legal pot shop in upstate New York, among the grand total of 4 that have been permitted. That’s compared to the estimated 1,500 illegal shops operating in New York City.

But back to my question, what is the economic impact of one pot shop in downtown Binghamton? Other than a higher tax rate on its products, how is a legal weed shop different from any other retail establishment to open in downtown Binghamton? So, I posed that question to one of the project’s advocates and to his credit he was good enough to answer.

Ok, this is an argument I can at least wrap my mind around, what the advocate is suggesting is that Just Breathe is what we call destination retail. This is actually an important distinction because one of the widely held rules of economic development is that retail establishments typically follow people and money. On the other hand, destination retail attracts new visitors and spending. People go in and experience destination retail, they stop and make regular purchases at traditional retailers. As an example, Bass Pro or Cabelas are typically considered destination retailers.

I actually can buy the argument that, for a while anyway, some people from out of town will drive to downtown Binghamton to buy legal pot from Just Breathe. Hell, I know people who have been driving to Massachusetts for years to buy legal pot. But answer this question, has Springfield, Massachusetts been transformed by spending from visitors to its legal dispensary? No. 

But it’s not just the product, it is also the relative scarcity of a brand or product that can create a destination retail type effect. Remember when Krispy Kremes were impossible to find? A Chick-Fil A, Sonic, Costco or maybe an Apple store; these are often such unique offerings that when they enter a community they drive visitation from buyers beyond the normal retail market. At the astonishing slow rate the state is moving in approving licenses, Just Breathe, might enjoy this advantage for some time in Binghamton. 

Now, also understand that depending where their customers are coming from, Just Breathe may not really create very much new economic activity at all. There is only so much disposable income available for “entertainment” in any marketplace.  So local pot dollars might simply be dollars that would have otherwise been spent on other forms of escape; alcohol, gambling, sports, movies or eating out. This is why economic developers so rarely incentivize retail, the money is getting spent anyway. The new money entering the economy hopefully are dollars from the black market to the legal market.

At the end of the day for Just Breathe, much like Krispy Kreme, the novelty will eventually wear out. Competition, broader availability and a maturing market will make the legal pot buying experience in New York mundane. Unless Just Breathe plans on putting Space Mountain or Hogwarts into their store, I don’t see how it stays a destination.

So please, elected officials, stop trying to gaslight everyone that retail weed is about jobs and economic development, it’s not.  It’s about people, legally getting high and the taxes the state can collect from it. And it is about empowering the people who went to jail for illegally making money off getting people high, to make money again for getting people high, legally. Call it social justice, call it criminal justice reform, call it loony tunes, call it anything you want but it is not economic development. 

Only in New York my friends.

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Help Wanted NYS Assembly

HELP WANTED !

ASSEMBLYMEMBER NEW YORK STATE LEGISLATURE

Looking for a highly ideological, progressive to join our team as a remote worker. We offer a competitive salary of $142,000 per year, with the flexibility to work from anywhere.

With only 58 days of scheduled work annually, this opportunity is perfect for someone who values work-life balance and enjoys flexibility. As a member of our team, you will have the freedom to design your own schedule and work in a way that best suits your needs.

The ideal candidate must live in New York State and be willing to work under the direction of management without questioning authority. If you meet these qualifications and are ready to join our team, please submit your resume and cover letter for consideration. We look forward to hearing from you!

(written by Dave Catalfamo & ChatGPT)

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There has been a lot of news lately about ChatGpt and its capabilities. If you haven’t heard, ChatGPT, is an artificial intelligence (AI) powered chatbot that is designed to understand and generate human-like text. I’ve tried ChatGPT and I can tell you it’s mighty powerful. It wrote the help wanted solicitation above with the direction of only 8 words and some light editing from me. For all you know it’s writing this blog post. ChatGPT is so powerful that in the very near future, it, or an AI likely better, might just take your job or mine.

That got me thinking, one job ChatGpt can definitely take today, is the job of Democrat Assemblymember.

Which is a bit astonishing because just a little over a month ago these same Assemblymembers voted to make themselves the highest paid legislators in all of America. Let’s face it, getting paid $142,000 a year and only having to show up for 58 scheduled days of work is a pretty sweet deal. But here, I foolishly thought that they might make a show of it and scurry about looking busy trying to convince people that they actually deserve that huge pay raise, at least for a few months. Well, I was wrong about that.

Instead, these Assembly Democrats went completely the other way and passed a rule that allows them to cast their vote even when they don’t show up for work. That’s right, they don’t have to drive to Albany, spend time reading boring legislation or sit in that big cavernous chamber to vote on important issues that affects your life – they get paid just the same. That’s because their boss, New York City’s own, Speaker Carl Heastie, tells them how to vote. That’s the same Speaker Heastie who is the architect of mayhem, otherwise known as our broken criminal justice system. 

After last week’s rule change, it’s clear, we don’t need actual people for the job of Democrat Assemblymember, Speaker Heastie can do it all on his own. I’d say we could replace all the others with ChatGPT, we would save some money and even get better results. ChatGPT is certainly smarter. And sadly, the ethical bar is so low in Albany, that if coded and used properly, AI could actually be more principled and transparent than many of the Assembly Democrat members who sold out their vote in this pathetic rule change.

What’s Keeping You Up At Night?

What’s keeping you up at night? I know what’s making me toss and turn. This week a friend sent me a story from his small town in upstate in which an individual was arrested for the possession of 100 bags of fentanyl and it got me thinking.

100 bags of fentanyl, the deadly drug 50 times stronger than heroin and 100 times more potent than morphine, one for every two people who live in that small community. The same fentanyl that’s being smuggled in record amounts across our porous southern border. Last year, the DEA seized enough fentanyl to kill every single American, while at the same time acknowledging they aren’t even making a dent in the supply. Fentanyl, cheap, powerful and nearly impossible to detect without equipment, is more and more being laced into other drugs to increase their potency. Yep, that’s the same fentanyl responsible for 90% of opioid deaths. The exact same fentanyl keeping parents across America up at night praying that their children’s first experiment with drugs isn’t their last.

You want to know who isn’t lying in bed at night worried about fentanyl killing our children, that would be many of our state legislators. Because at about the same time this individual was being arrested, our state legislators finally – finally – held a hearing to examine crime data as it relates to our broken criminal justice system. And as you might have guessed, the same geniuses who gave us these laws concluded that as far as they could tell, everything is just fine. Speaker Carl Heastie, chief spokesperson for Team Mayhem, repeated the loony left’s mantra that it’s really mostly just a “perception” problem created by the media and the Republican fear monger machine. 

One of New York’s greatest, Mark Twain, famously said, “There are three kinds of lies: lies, damned lies, and statistics.” In Albany we have statistics, lies, liars and the others who will swear to it for one reason or another. The fact that this is the first public hearing on the issue of public safety since the spate of these new laws have passed is a crime in and of itself. The fact that despite all the well chronicled concerns, the Division of Criminal Justice Services is serving up incomplete statistics on the basis of the political calendar is a disgrace. And the fact that Governor Hochul failed to use her budget powers to absolutely ensure that the issue of public safety will be meaningfully addressed this legislative session is a sad abdication of power.

Now dealing with illegal drugs isn’t an easy problem (none of this easy) and I am proud to have worked for the Governor who dismantled the misguided Rockefeller Drug Laws. But in a state that banned magazines of 10 rounds or more for guns because they were worried about the carnage of one shooter, what about the carnage of one dealer with 100 bags of fentanyl? Instead of addressing our broken criminal justice system, instead of keeping violent criminals and repeat offenders off the street, Democrats in Albany will blather on about guns as they push a passel of bills that if passed, will only further erode public safety and any sense of individual responsibility. 

Oh, if you are wondering about what happened to the individual with the intent to traffic 100 bags of fentanyl, we’ll probably never know as she was only issued an appearance ticket and released free without bail.

Hochul’s Budget Firsts, Unlike Anything in the Modern Era

Next week Governor Hochul will present the 2023-24 Executive Budget, what it will look like is anyone’s guess as we are in some seriously uncharted waters. Consider the following firsts:

• First budget post COVID;
• First budget crafted by Governor Hochul’s own team, without longtime Senate and then Cuomo budget guru, Robert Mujica;
• First budget as the ELECTED governor of New York (yes, it makes a difference);
• First of its kind, Hochul’s budget as elected Governor, is without modern historical precedent, as it will be presented to a legislature with veto proof supermajorities of the same party. 

And then of course there are the big expectations that come along with first budgets. Historically, first budgets have been used by new Governors to reset priorities, rebase taxes and or spending, sometimes in response to economic challenges, other times simply to create room in the spending plan to pay for their own priorities. The thinking is to take the pain, do the hard things in year one, when you have the most political clout, to realize wins closer to the reelection.

Consider the last five elected Governors and the main thrust of their initial budgets.

• Governor Andrew Cuomo swept into office after the scandal and chaos of the Spitzer/Patterson years, and facing the loss of $6 billion in federal stimulus funds, Cuomo rebased the state’s gargantuan unaffordable Medicaid program and dramatically reduced the rate of spending growth.

• Governor Elliot Spitzer, the outlier in the group, took office in solid economic times and with solvent state coffers, sought to rebase education aid upward by a whopping $7 billion. 

• Governor Pataki was elected to office with a $5 billion deficit, rebased the state’s tax system, cut income taxes and dramatically tamed the growth of government. 

• Governor Mario Cuomo took office in a recession with a $1.5 billion budget gap. The Governor sought to rebase the state workforce seeking to eliminate through attrition, retirement and layoffs some 14,000 state jobs. 

• Governor Hugh Carey, was sworn into office with New York City on the brink of fiscal insolvency. Carey famously said in his first State of the State address “Now the times of plenty, the days of wine and roses are over,” referring to the profligate spending and taxes of the Rockefeller years. Carey miraculously managed to cut taxes and ultimately secured a loan from the federal government to bail out New York City.

To sum it up, every first term Governor has sought to implement a major initiative, to enable their own agenda by reshaping spending priorities but each of them had a legislature split between Republican control in the Senate and Democrats in the Assembly. Today, Governor Hochul faces a newly emboldened veto proof legislature, with no ideological power center to balance agendas.

After years of hiding under their desks cowering in fear from the twin tyrants of COVID and Cuomo, the State Legislature is back and like a bear coming out of hibernation they are hungry. Reinvigorated by a hefty pay raise, feeling their oats from rejecting the appointment of Hochul’s top judge nominee, the newly rejuvenated legislature seems to be intent on having their way.  

Since taking over from Cuomo, in the midst of COVID and facing an election, Hochul has been very deferential to the Legislature’s wants and needs. In a sense, their collective priorities aligned politically as a means to stave off a challenge from her left in the Governor’s race. But with the election over and a fresh four year term under her belt, those interests have now diverged.

Finally, while there is cash on hand today, Governor Hochul faces a fiscal picture with a decidedly gloomy outlook. Billions in federal COVID funding, which have helped to prop up state spending, will run out this year. The impact of COVID and the rise of remote work has devastated the New York City real estate market creating huge shortfalls in tax collections. All compounded by stubborn inflation and a looming recession which New York, historically, is first to enter and last to recover.

Against this backdrop, Governor Hochul will propose her Executive Budget. The stakes are high, in both political terms and pure fiscal terms. Today, New York’s budget stands at over $220 billion. (For comparison, Governor Carey’s final budget in 1982 was $25.9 billion.) Unlike any Governor in the modern era, as she approaches the introduction of the Executive Budget, Governor Hochul is facing a uniquely challenging environment. 

As a statewide elected official, Hochul, like Cuomo before her, has the most political incentive to try and tame the radical agenda of the New York City progressives and socialists. But unlike Cuomo and his predecessors, it will be a much, much harder road to hoe. 

5 Takeaways From the 2023 State of the State Address

It was good to see Governor Hochul back in a packed Assembly chamber giving the 2023 State of the State address.  It was the first time in a dozen years that this worthy tradition was fully revived since Governor Cuomo moved the address out of the chamber.  Last year, Hochul gave the address to an empty Assembly Chamber due to Covid concerns.

The speech itself was unremarkable but mercifully short when measured against past State of the States.  For their part, fellow Democrats in the Legislature responded to the address unenthusiastically giving Hochul, the first elected woman Governor of New York, only one standing ovation. You might think given the fact the Governor just approved a massive legislative pay hike, while extracting nothing in return, might earn a bit of goodwill. 

These are my five takeaways from the 2023 State of the State.

1. In the category of a small consolation prize, Hochul’s address echoed multiple themes sounded by Republicans in the last campaign; issues such as bail reform, law and order, affordability and population loss were all front and center in the address. 

2. The largest new initiative was a proposed $1 billion investment in mental health for more beds, inpatient treatment options and services in schools. After decades of disinvestment in mental health, this proposal is long overdue.  In some ways the proposal also dovetails with GOP calls for enhanced mental health services to combat gun violence and crime.  

3. Radical energy policies continued to be aggressively advanced; a ban on natural gas hookups for new construction by 2028, and a ban on the sale of any new fossil fuel-powered heating equipment by 2030,  which would include gas cooking stoves. Hochul’s plans are not out of step with national climate change zealots, as the Biden administration this week is considering a nationwide ban on gas stoves.

4. Local zoning and home rule are once again under assault, this time in the name of housing affordability. Last year, Hochul briefly floated the concept of state override of local zoning for accessory housing, but wisely backed away from it in an election year.  This year the administration is back with a plan to build 800,000 new homes in the state over the next decade. To make that happen, local governments would be required to meet a goal of growing their housing stock by 1 percent every three years (3% in NYC) – if that fails developers would be allowed to bypass local officials entirely and get their projects approved via the courts or a new state housing approval board. Needless to say the impacts of this controversial initiative would vary considerably across the state.

5. With runaway inflation leveling the buying power of real wage increases for New Yorkers, Hochul advanced a proposal to index the minimum wage with the Consumer Price Index. This was the only proposal in the speech that moved suddenly emboldened legislators to rise from their chairs for a standing ovation.

Out of the gate, it looks like for the first time in a long time that the Legislature is feeling its oats. After three years of most of them hiding under their desks during Covid, the legislature is well rested and ready to come out swinging. With a bruising battle for Hochul’s nominee for Chief Judge of the Court of Appeals ahead and a decidedly frosty response to the State of the State, the stage is set for one of the most combative sessions in some time.

Legislative Pay Heist

Between spending on the holidays and inflation driving the cost of just about everything through the roof, more and more people are underwater with their bills, often robbing Peter to pay Paul just to keep up.  Wouldn’t it be nice if when things got tight you could just give yourself a big fat pay raise – well that’s exactly what legislators did in Albany making them the highest paid legislature in America. They are robbing both Peter and Paul and every New York taxpayer to line their pockets for what many say is a part time job.

Most of us believe that the right way to get a pay raise, is to earn it by doing a good job.  By any objective measure, has our government in Albany, a mecca for woke policies, done a good job? In my estimation, state government has descended into a toxic brew of socialist ideology, gross incompetence and systematic corruption. Consider the record:

Facts:

• A 29% pay raise effective immediately moves lawmakers pay to $142,000
• Legislators were in session a grand total of 60 days in 2022`
• The median income in New York State is about $60k
• New York State taxpayers are the highest taxed in America
• The state’s business climate is ranked #49 out of 50 states
• We pay $3,600 per capita on Medicaid compared to the national average of $2,048
• New York spends more per pupil than any state in America
• Criminal justice policy has elevated the rights of criminals over law abiding citizens
• People are leaving the state in record numbers
• Over $11 billion in unemployment insurance fraud was robbed from New York taxpayers

Is this a record that deserves a pay raise?

Gerrymandering the Capital Right Out of Albany

Just as New York City Democrats are poised to gerrymander upstate influence and interests into oblivion, they want even more. Today, New York City already has all the power.  They dictate insane criminal justice laws that allow violent criminals to roam free, regulations that cripple our small businesses, labor policies that are killing family farms and a tax burden that is the highest in America. But as put forth in yesterday’s Daily News, that is not enough…in a preview of what’s to come: they want the state capital. 

Their rationale is that Albany is just too small not to be corrupt and state government, well it just wouldn’t be important enough in New York City for anyone to bother to corrupt it. Yep, (take a moment to catch your breath) that’s right. The theory is that it’s us upstate hicks, free from the wise and virtuous gaze of the downstate elite, that are letting corruption ruin government for the rest of the state. They even cite a study to back it up.

In the writer’s view, Albany is a veritable Shangrila of dark power, wading in a cesspool of campaign contributions and special interest largess. Apparently, the writer hasn’t been to Albany, which under Andrew Cuomo in recent years looked more like a prison camp than a capital city. The notion that lawmakers are being pigeonholed in swanky Albany watering holes is a joke – lawmakers by and large haven’t even been in Albany for the past two years.  Moreover, since the restrictions on the lobbying law, most don’t even go to dinners anymore actually hurting Capital Region restaurants. Finally, the ill informed notion that the New York City press corp is so much more vigilant as a watchdog than those stationed in Albany is as insulting as it is disillusioned.

The writers real purpose it to suggest poaching the one thing state government does provide upstate cities: jobs and real estate tenants. His solution, move state offices to New York City so they can help fix the sky-high commercial office vacancy rate that has resulted from Covid-19 pandemic.  Upstate cities for years have been hollowed out in large part because small businesses can’t compete in a cost and regulatory structure dictated by New York City, so now facing an existential challenge, they want to take what has been left to us, government.

This is only the beginning.

The arrogance. The hypocrisy. The stench of gross entitlement from this class of New Yorkers, who have contributed to the downward spiral of this state, is rich. Please fix your city on your own and stop screwing up the rest of the state in the process. At least you finally have a mayor who gives a damn.

If you want a real solution, here is one: make your own state and give us our own – New New York.  It will make for a grand bargain in Washington. Democrats want Puerto Rico, Republicans will take New New York. In New New York, we will act logically and compassionately. We will lower taxes, keep violent criminals in jail, our schools will be free of ideological dictates and we can shed all the debt of the MTA and other dysfunctional city centric relics. Sure, we will need to invest in infrastructure but New New York won’t be a donor state and we will do much better in our balance of payments to Washington for a while.

I have no doubt New New York will be a haven for the city wealthy that want to escape the high taxes and crime–many have already. But I believe New New York will ultimately be a magnet for people all around the nation and the world. They will love our quality of life, our farms, our small towns, our quality and affordable public college and university system, our clean air, our clean water, and most of all they will love the common sense and industriousness of our people.

We’ll even keep Albany too.