White Book FY 2022

January 26, 2021 Dear Senators, Enclosed herewith is the “Staff Analysis of the FY 2022 Executive Budget.” It is intended to assist the members of the Finance Committee and the Senate as a whole, in our deliberations. We hope that our readers find it useful. The analysis of the Executive Budget begins with a summary of the spending plan. It then offers an explanation of proposed changes that affect receipts and provides for Senate Issues in Focus. Finally, it provides a summary of the Executive’s Article VII language bills submitted as part of the Executive Budget. The report provides an analysis of the appropriations recommended this year and an analysis of the governor’s recommendations. Each member of the Senate Finance Committee devotes considerable time and effort to the passage of a budget that serves the interest of every New Yorker. I am most grateful for their cooperation. It is also a pleasure to thank the staffs of both the Senate Finance Committee, and the Counsel and Program Office, whose assistance has been invaluable. Sincerely, THOMAS F. O’MARA Ranking Member, Finance PAGE INTENTIONALLY LEFT BLANK REPORT OF THE SENATE FINANCE COMMITTEE MINORITY STAFF ANALYSIS OF THE FY 2022 EXECUTIVE BUDGET Dedicated to the memory of our friend and colleague Tom Havel Shawn MacKinnon Kristin Frank Secretary to the Finance Committee Minority Counsel to the Minority Finance / Counsel Staff Peter Drao Morgan Halloran Dave Thoman Benjamin Kosinski Jeffrey DeGironimo Robert T. Farley Benjamin Eddy Barbara A. McRedmond James W. Eagan Kevin Gannon Steven Rodway John Banville James Connolly Brittany Volpe Charles Silverstein Joseph Messina Alison Beck Publication Editor Keith McNab PAGE INTENTIONALLY LEFT BLANK TABLE OF CONTENTS SECTION ONE: HIGHLIGHTS OF THE FY 2022 BUDGET OVERVIEW OF THE FY 2022 BUDGET – FINANCIAL TABLES .............................. 1 Education ................................................................................................................ 13 Higher Education .................................................................................................... 23 Health – Medicaid – Aging ...................................................................................... 35 Transportation......................................................................................................... 65 Environmental Conservation, Agriculture, And Energy ........................................... 71 Public Protection ..................................................................................................... 85 Economic Development ........................................................................................... 95 Mental Hygiene ..................................................................................................... 101 Human Services ..................................................................................................... 111 General Government ............................................................................................. 125 Receipts, Taxes And Fees....................................................................................... 139 SECTION TWO: SENATE ISSUES IN FOCUS College Affordability ........................................................................................................ 145 Federal COVID-19 Aid To New York............................................................................... 151 Recreational Marijuana ..................................................................................................... 157 Middle Class Tax Cut........................................................................................................ 161 Transportation Capital Plans ............................................................................................. 165 The New York Health Act (Single Payer).......................................................................... 171 Local Government Impact ................................................................................................. 175 Congestion Pricing ............................................................................................................ 181 Criminal Justice ................................................................................................................ 187 Minimum Wage (Update) ................................................................................................. 193 State Spending Cap ........................................................................................................... 195 Workforce Update ............................................................................................................. 199 New York State Property Tax Relief ................................................................................ 201 SECTION THREE: SUMMARY OF ARTICLE VII LEGISLATION & APPENDICES Schedule For Legislative Review of the FY 2022 Executive Budget ................................. 215 Appendix .......................................................................................................................... 217 Article VII Legislation ...................................................................................................... 219 PAGE INTENTIONALLY LEFT BLANK SECTION ONE HIGHLIGHTS OF THE EXECUTIVE BUDGET PAGE INTENTIONALLY LEFT BLANK Staff Analysis of the FY 2022 Executive Budget Overview OVERVIEW FY 2022 EXECUTIVE BUDGET For the third straight year, the Executive Budget for FY 2022 continues to impose tax and fee increases, while reducing State funding to critical priorities such as education, health care and local government assistance. In the two years preceding this proposal, the Executive and the Legislature have enacted tax increases that have included the following impacts from FY 2020 through FY 2022: • Extending various taxes that were due to sunset in FY 2020 $7.9 billion • Collection of internet sales tax from marketplace providers $670 million • Taxation of tobacco, E-cigarettes and vapor products $40 million • Increase the auto rental tax $97 million • Establish an opioid surcharge $300 million • NYC real estate transfer tax $1 billion • Discontinue energy sales tax exemption $128 million • Cap long term care tax credit $28 million • Increase tobacco products tax $33 million The Executive continues to advance tax increases at a time when individuals, families and businesses are facing the challenges of the COVID-19 pandemic. The FY 2022 revenue proposal builds on two years of tax increases including a damaging tax increase on the middle class as a gap closing action. This tax increase equates to $394 million in FY 2022, $403 million in FY 2023, $445 million in FY 2024, $464 million in FY 2025 and $368 million in FY 2026, or $2.1 billion until the tax cut becomes fully effective. In addition, for the second consecutive year, the Executive Budget reduces the State’s commitment to education, health care and local government assistance. In the current year the Executive and the Legislature agreed to reduce the State’s commitment to education and healthcare and backfill with Federal CARES Act funds. The Executive proposal for FY 2022 utilizes this same approach by again reducing the State’s commitment through several formulaic mechanisms and backfilling with funding from the Federal Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) (see education section). The same approach has been employed for Medicaid where in the current year (FY 2021) the Executive and the Legislature utilized the Medicaid Redesign Taskforce (MRT II) to reduce funding by $2.3 billion and has FY 2022 Executive Budget Summary | Page 1 supplanted this reduction with $500 million in enhanced Federal Medicaid Assistance Percentage (FMAP) funds. In FY 2022 the Executive proposes to reduce State Medicaid funding by $599 million and backfill the cut using enhanced FMAP funds amounting to $995 million. In terms of local government assistance, the Executive is proposing further cuts to the Aid Incentives to Municipalities (AIM) program beyond what was enacted in FY 2020. In FY 2020 the Legislature and the Executive agreed to reduce the State’s commitment to AIM funding by $59.2 million and requiring counties to utilize their sales tax revenue to backfill the lost State funds. The FY 2022 Executive Budget proposal reduces the State’s commitment to AIM funding again by $43 million and requires counties to backfill $8.5 million to towns and villages. The Senate Republican Minority is advancing a plan that stands in stark contrast to this approach. The Senate Republican Minority RESET-NY plan includes a rejection of the Executive’s plan to increase taxes on the middle class. The plan also includes an urgent call to have both houses of the Legislature restore the balance of power to our State government so regions across the State can have a voice in the safe reopening of businesses and schools. The New York State Senate Republican Minority Conference’s plan focuses on Restarting our local economies, Rethinking how New York operates, and Renewing our commitment to the hardworking people of the State of New York. This bold vision will help our State realize a brighter, stronger, more prosperous future. According to the US Bureau of Labor Statistics New York State has lost 37,200 jobs between November and December of 2020. Over the course of the last year, the State has lost a significant number of jobs in specific sectors of the economy, which has had a corresponding

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