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Cuomo, legislative leaders agree on budget

Apr 01, 2016 1:28 am
Legislative leaders and Governor Andrew Cuomo announced a budget agreement, several hours before the April 1 deadline. The agreement, a statement from Cuomo says, includes a plan for a statewide $15 minimum wage, 12 weeks of paid family leave, a tax cut, and lots of education and infrastructure spending.

Below is the complete statement from Governor Cuomo, followed by the transcript from the press conference:

This evening, Governor Andrew M. Cuomo announced an agreement with legislative leaders on the 2016-17 state budget. The budget includes a number of accomplishments and initiatives that will strengthen opportunity for working and middle class families, including:
· Raising the minimum wage to $15 an hour in every region of the state
· Enacting the longest and most comprehensive paid family leave policy in the nation
· Holding the growth in state spending to two percent for the sixth consecutive year
· Cutting the personal income tax, saving middle class New Yorkers nearly $6.6 billion in the first four years, with annual savings reaching $4.2 billion by 2025
· Providing $24.8 billion in School Aid – the highest in state history – and ending the Gap Elimination Adjustment
· Investing $55 billion in the largest state transportation plan ever approved – including $27 billion for the DOT and Thruway and $27 billion for the MTA

A rush transcript of the Governor’s remarks is available below:

Okay – good evening everyone. For those of you who don’t know the assembled team, we have Mr. Jim Malatras to my right, who is the Director of State Operations. To my left, Mr. Robert Mujica, who is the Director of the Division of Budget – an especially appropriate division this evening. And Alphonso David who is the Counsel to the Governor.

We have been going through a discussion all week long on the budget. Earlier today we reached a final resolution with all the “I”s dotted and all the “T”s crossed. The bills are being printed. The respective leaders are presenting the final details to their conferences on the Assembly side and the Senate side. And we want to bring you an update at this time as to what’s actually in the budget. The budget is obviously for year 2016-17. I am very excited about this budget. We call it a budget – really it is an overall operating plan for the state of New York and I believe that this is the best plan that the state has produced, if its passed, in decades, literally.

To begin with, the budget is designed to stimulate the economy and raise the minimum wage. There has been a lot of talk about raising the minimum wage and raising the minimum wage in and of itself is a very progressive, very fair initiative. Remember, the minimum wage law was passed by FDR. He was a great Governor of New York. The concept was that we value work and if you work full time then you should have a decent living, that was the concept of FDR. The current minimum wage in the state of New York – although we have raised it in the past – in our opinion does not afford one the ability to live a decent life. You can’t lead a decent life, you can’t raise a family on $18,000 a year in the state of New York. So we want to raise the minimum wage, which in and of itself would affect 2.3 million workers.

At the same time raising the minimum wage can be a simulative factor for the economy. You can actually increase economic performance by raising the minimum wage. Why? Because it puts more money into the economy. If you give someone on a minimum wage a raise, do you know what they do with it? They spend it. They don’t put it in the bank, they need it. On the current minimum wage it would be about a $15 billion dollar injection into the economy. So when you look at the past times that the minimum wage has been raised, the economy has actually increased because of the raise in the minimum wage. Employment has actually increased.

The key then is calibration and you have this political debate about, “well raising the minimum wage is good for the economy,” “well raising the minimum wage is bad for the economy.” The question is really the calibration of the increase in the minimum wage. If you increase it at the right rate, all experts will agree that it can be a positive for the economy overall. If you increase it too quickly, people have a fear that it could have a negative impact. So what is the right calibration? If you ask five different economists you will get five different answers. Why? Because they are all forecasting what they believe is going to happen in the future. They are all looking at their crystal ball saying in five years it is going to be doing this and in seven years this, if anyone really knew what the economy was doing in five or seven years, they would be billionaires and be sitting on the beach, right? So what we have designed is a calibration mechanism that can be adjusted in the future when you know what the economy is doing in the future. And a calibration mechanism that understands there is no one state economy, there are variations in our economy and some areas of the state, the economy is more robust and in some areas of the state it is less robust. So our calibration mechanism that is attuned to the regional variations in the state.

So where we came out which is what we have been working on through the week, three years to $15. The one new addition for those of you that have been watching everyday, is that in New York City we extended from three to four years, the length of time for businesses with fewer than ten employees to get to $15. That frankly has been the major adjustment during the week. Long Island and Westchester is six years which is what we have been discussing, the rest of New York State, “upstate” as well as we have been referring to it. In five years to $12.50 and then indexed to $15. At what index? At an index to be determined as the appropriate calibration at the time by the Division of Budget.

So in five years, it is at $12.50 at that point then you will assess the economy in upstate New York, the strength of the economy in upstate New York, you will determine what rate of increase for the minimum wage is best suited to continue to grow the upstate economy. I am very proud that as Governor I have spent more time and resources helping upstate New York than probably any governor in history believe it or not. Between the regional economic development councils, the buffalo billion, the URI project, etc. We have a tremendous investment in upstate New York, it is working very well. We believe the increase in the minimum wage can help the upstate economy but again it is all about that calibration. And this is the smartest and safest way to go about it in my opinion. To $12.50 and then an index which will be determined by the Division of Budget based on economic factors at the time.

Beginning in 2019, the state can suspend the scheduled increases if the economic conditions warrant it. Okay? So this is a safety valve that is basically a further extension of the calibration. You want to increase it at the right rate and, if the economy turns, you want to be able to pause it. Have a safety valve. Again, the economic forecast is not just the economic forecast for this state. It’s “what is the economy of the nation doing in three, four, five years. What is the international economy doing in three, four, five years.” If the economy turns, we will have the ability to suspend the minimum wage so we don’t hurt a slowing economy.

Second, the budget includes paid family leave which is something I am very excited about I spoke about it in the State of the State. This will affect the quality of life of millions of people in the state. And it’s basic and simple: We don’t live at work, we live at home with families and we should have the capacity to be there when the family needs you. Whether it’s a good news or bad news situation. Whether you are bringing a new life into your family and the mother or a father want to be able to take time to stay home or the family is losing a member. And you want to be there to share that time with that individual. You shouldn’t have to be in a position where you have to choose between a paycheck and being there for your family – and paid family does just that.

It’s 12 weeks it will be the longest period in the country, it’s funded by employee contributions. Benefits up to two thirds of what the paycheck was and, as I have been saying, it’s literally a life changer. The budget also includes a $4.2 billion middle class tax cut which is a truly significant tax cut. We have been cutting taxes in the state all along. We have historic lows when it comes to the income tax rate and this will bring historical lows even lower. It will affect the rates 40 to 150 and 150 to 300 so it’s literally from $40,000 to $300,000 for couples filing jointly. It’s a very broad swath of taxpayers. It will bring the rate down to 5.5-percent which is the lowest rate in 70 years.

We are investing more in education than ever before – $24.8 billion – the largest single investment in education in the history of the state of New York, period. A 6.5-percent increase from last year. It will eliminate the so-called GEA in one year. GEA has been a very controversial topic. It began before I became Governor. It’s when school districts were cut during Governor Paterson’s’ administration and basically the state issued what has been perceived as an IOU to those school districts and this will pay off those IOU in one year. It will also dedicate $100 million to transform failing schools into community schools and this is very important to me. We talk about the level of education funding. We don’t talk enough about the targeting of education funding and the priority should be the schools that need the most help in this state. The schools that need the most help in this state are called failing schools. There are 144 of them. They’re in the poorest places of this state. This targeting to community schools goes directly to the failing schools – not just to lower income districts – but the schools in that district that have the greatest need. So it is truly the most specific targeting the state has used.

The budget also supports the largest infrastructure plan in our state’s history. The legislation that we pass in this building is important, the work we do in this building is important. What is just as important, if not more important, is the actual construction that this state does - the development, the building, the infrastructure. We saw that with the Tappan Zee Bridge, where we not only addressed the critical infrastructure need, but showed it could be done. The Tappan Zee Bridge is not just a bridge but a symbol of possibility for me. We were doubting our capacity for a long, long time and the Tappan Zee Bridge says yes you can. We knew that we needed to but it showed that we actually engage and we can build efficiently and effectively.

This budget supports a massive infrastructure construction program, literally $27 billion for the MTA, which is the largest capital plan for the MTA. It supports the Penn-Farley reconstruction, which is a critical traffic hub in the City of New York. The Penn Station, and Farley Station, that transportation hub is one of the most widely traveled on the globe. More people go through Penn and Farley than go through our three downstate airports – Newark and New Jersey, Kennedy, La Guardia combined – that’s how many people go through Penn Station. And it really is an inferior, substandard station. It has been for years. It’s a disgrace, frankly, that it’s been allowed to operate for as long as it has. It’s not technically owned by the state of New York. It’s owned by Amtrak. LIRR leases space in Penn Station from Amtrak, but between Penn and Farley, there will be a total comprehensive redevelopment. It also has funding for the new airport at LaGuardia.

It also has $1 billion for the Second Avenue subway, to continue that project, which is very important to New York City. $27 billion for the Department of Transportation so this quote-unquote parity between the downstate investment and the MTA’s $27 billion. And $27 billion for DOT, upstate roads and bridges, water and sewer, also $200 million for an upstate airport design competition. Upgrade your infrastructure, it’s the single-best common denominator to help economic growth. And all of this for the sixth year in a row where we’ve kept spending below two percent.

Two percent is a lower rate of spending increase than any of my predecessors in modern history. It’s a lower rate of spending increase than Governor Spitzer, Paterson, Hugh Carey, Mario Cuomo, Rockefeller, so it is a tremendous display of fiscal discipline, which has worked for the state. And at the same time you see more education funding than ever before, the largest infrastructure development program, etc.

It also includes in this budget $20 billion for the housing and homeless action plan we spoke about in the State of the State. $54 million to combat terrorism. This developed over the past few weeks, frankly, after the Brussels incident. New York is a target. We are well-prepared, we are trained, we are on top alert, but I think terrorism is an ongoing battle and it’s going to be an ongoing exercise, unfortunately into the future, I believe. So $54 million for additional anti-terrorism-related activities.

$15 million for non-public school safety grants. This is in addition to mandated services. Charter schools need more help and more funding. Regional Economic Development Councils Round Six. $100 million for the New York State Downtown Revitalization Initiative, $300 million for the Environmental Protection Fund, and a minimum wage. I’m very excited about that because that has been overlooked for too long. There has been a lot of talk about helping farm workers and there has been very little action. This is probably the most expansive budget and state plan that the state has passed, as I mentioned before, in decades. It also is done at a very difficult political time. Not especially in the state of New York, but this is a difficult political time in this country. I can’t remember a time of more political chaos, more political heat on both sides of the spectrum. And truly the politics nationally are at a high boil.

We believe here in New York and the past six budgets have shown that we believe government can work. We believe you can have democrats and republicans who can work together and reach a compromise. We believe you can have a senate and an assembly that start with different priorities and reach compromise. And to me this budget shows that even when the political temperature is as high as it is at this time in history. And I have tremendous respect for both leaders who have been working on this budget for many, many weeks. Senator john Flanagan, I think has done an extraordinary job. Speaker Carl Heastie has done an extraordinary job. And the politics that are happening nationwide also reverberate in the state of New York – don’t kid yourself. We have people in New York State who are as liberal as any people in the country. We have people in New York State who are as conservative as any people in the country. So we feel the political turmoil and I applaud the leaders for coming up with this diverse plan – a plan that does this much good in this many different areas – from economic development to construction to tax cuts, etc., at one of the most difficult times.

As I said they are presenting it to their conference. They have been talking to their conference for weeks. There are many details that have changed over the past few days. And we still have a vote to take. And we’ll see what the consequence of the vote is. But they have done a really extraordinary job.

And this state, as I’ve said before, is not just another state. This is a state that has a proud legacy and history of leadership, and this budget, I think, once again, makes New York State the progressive leader. We were the progressive leader on social justice, when we passed marriage equality we set a very powerful precedent all across the country. What we did with the SAFE Act and gun control was a powerful message all across the country. So we were leaders in social justice. And now we’re leaders in economic justice.

This minimum wage increase will be of national significance. And not just the raising of the minimum wage, but how we did it. It’s not just raising the minimum wage. It’s raising the minimum wage in a way that is responsible and is a positive for the overall economy. And developing a calibration mechanism that allows you to adjust, to say “well if you raise the minimum wage it can only be good” – it depends. It depends. A lot of questions, in truth, come down to “it depends.” Not black and white. It depends. It depends on what the economy is doing and how fast you’re phasing in the minimum wage. So you have to develop a sophisticated mechanism to deal with that calibration. And this policy does that, while it really does increase the wage for people who truly need it. So we’re excited about it. It’s been a lot of work. The leaders have agreed to it, and again it’s not done until it’s voted on by their conferences, but they have been talking to their conferences all along. They’ll have the votes tonight, I guess, depending on their schedules, how long it goes, but those are the final details. The bills are being printed and will be distributed as we go.

With that let me turn it over to the learned crew who actually did all the work and have been up for days and days slogging through the details – any of you gentlemen have anything to add? Rob do you want to go first?
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