Was There any Urban Policy in the Governor’s Race?

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Gov. Cuomo October 2014

Office of the Governor

Gov. Cuomo October 2014

In the final minutes of the only gubernatorial debate — after a fair share of bickering between Gov. Andrew Cuomo and Republican challenger Rob Astorino over who lowered taxes more — Cuomo’s seemingly endless counterattack hit a crescendo.

“Over my dead body,” the sitting Democratic governor said, referring to Astorino’s pledge to stop a Cuomo initiative called the “Buffalo Billion.”

“That would be saying, ‘Drop dead Buffalo,'” he continued.

Cuomo calls his “Buffalo Billion” plan an “enormous success,” and recently announced plans to expand the model to other struggling cities Upstate. It’s been the showpiece of his urban policy agenda in his first term and looks to be the foundation for his approach to cities should he win a second. But Cuomo’s “Buffalo Billion” has been criticized by both the left and right. His two main competitors, Astorino and Green Party candidate Howie Hawkins, say they would end the program. It’s one of the few things they agree on; they otherwise have strikingly different plans for fixing problems in the state’s urban areas.

Whether or not New York’s cities are better off than they were before Cuomo took office in 2011 is up for debate, though it was only briefly discussed at the actual debate. Most of the major successes Cuomo has touted during his re-election campaign have been widespread policy changes that impacted the lives of New Yorkers across the state: stricter gun laws, same-sex marriage legalization and the beginnings of a statewide pre-K. He also never forgets to say he passed four on-time budgets and got Albany’s “fiscal house in order,” after years of dysfunction.

But some of his policies — many that have gotten less attention statewide — have had mixed results for cities. And while Cuomo has been concentrating on the positive during his campaign, his opponents have been hammering him on the negatives.

The majority of children in Buffalo are living in poverty, according to recent Census data. Rochester is the 12th poorest city out of the country’s biggest 575 cities. Syracuse is not far behind, at 23. Buffalo, 31. New York has the poorest Census district in the nation, district 16 in the Bronx. New York ranked 47th, or 5th worst, in the country (out of 51 including Washington, D.C.) in overall homelessness, according to “The State of Homeless in America 2013.” These conditions have been around for a while, before Cuomo took office, but his opponents are blaming him for not doing enough to make things better.

“We’ve got cities that are losing. Poverty here in Buffalo is off the charts, especially with children,” Astorino said at the debate.

The plans

Astorino’s economic plan to fix this is to reduce taxes, reduce regulation and cut spending. His platform includes a reduction in the income and corporate franchise taxes and the elimination of the estate tax.

Hawkins’s plan is the opposite. He wants to increase taxes on the wealthy to reinstitute what he calls the “progressive tax structure” of the 1970s to pay for an array of additional services. He also said he would bring back revenue sharing with municipal governments and wants to increase the state minimum wage to $15 per hour, while allowing municipalities go above that.

Until last Thursday, a day after the debate, Cuomo’s second-term agenda has been missing from his re-election campaign. In stark contrast from his 2010 campaign where he released 10 policy books laying out his plans for New York, there’s been a lack of information this time around.

Last month, he published a memoir called “All Things Possible,” and in it, first revealed he wanted to expand the “Buffalo Billion” model to other cities. The model so far has been to lure clean energy companies to Buffalo. The state committed $750 million in subsidies to a solar panel company, SolarCity, to create 3,000 jobs and also is spending $225 million to create a clean energy hub that the state will own, but companies will lease space from.

“Rochester, Syracuse, Utica, Watertown, and others merit their own version of the Buffalo model,” he wrote.

He expands on this idea in the policy book released a day after the only debate to say he plans to create a $1.5 billion Upstate Revitalization Fund, a program that will award grants or tax credits or loans for projects that will help struggling economies.

“Upstate New York was abandoned by Albany. There’s a downstate mentality that took over and everybody focused on downstate and Upstate New York, frankly, didn’t get the attention it deserved,” he said at the debate.

Not even two years since announcing it, Cuomo says the “Buffalo Billion” plan is a success. But the usual questions arise about giving large subsidies to private companies to invest: Will the company follow through on creating jobs? Did the state get enough return for its investment? Could the money have been better spent elsewhere?

Buffalo’s “Investigative Post” has been on top of it, questioning whether the centerpiece deal of the “Buffalo Billion,” that $750 million state investment in SolarCity, will ever be successful. Since forming, SolarCity has lost $452.6 million, according to its SEC filings, but Cuomo is counting on it to create 3,000 jobs in Buffalo.

Writes Investigative Post’s Jim Heaney: “While SolarCity is fending off plaintiffs and investigators, company officials are also developing plans for their expansion into Buffalo. Whether they can succeed is a $750 million question.”

Astorino calls it “massive corporate welfare.” In an interview recently, this reporter asked Hawkins about the “Buffalo Billion.” He paused.

“Let me tell you about the Syracuse zero,” he said.

Cuomo’s other proposals to boost economies in struggling cities outlined in his new agenda book include creating a New York Business Assistance Team to help small businesses, appointing a state Chief Small Business Officer and expanding his START-UP NY program that can relocate businesses so they pay less taxes to expand. But many of the policies he established in his first term that directly affect urban economies will continue should he win.

Mayors’ complaints

One of the biggest complaints you’ll hear from a mayor of a city in New York is rising labor costs; pension and health care expenses are rising while state aid has been hacked away. Pair that with a declining property tax base due to a crumbling manufacturing base and an exodus of middle-class families to the suburbs and it’s no mystery why cities are strapped, unemployment is high and in some cases, poverty is rising.

When Cuomo took office in 2011, his first budget continued a major cut that began a year earlier by Gov. David Paterson. Between 2007 and 2010, the state’s Aid and Incentives to Municipalities (AIM) program distributed between $1 and $1.16 billion across the state. That funding was reduced to $775 million in the 2010-2011 budget and has been stagnant in every Cuomo budget since: between $753 and $764 million in his first four budgets and his five-year financial plan through 2018 does not increase those funds beyond $793 million.

What Cuomo has done is offer incentives to municipalities to get more money if they consolidate services. But Rochester Mayor Lovely Warren wrote the governor a letter in February that leaked to the press saying that approach doesn’t work for her city.

“The single most imperative action that the state can take to help Rochester is a more equitable approach to AIM aid,” she writes, in a letter that was obtained by WROC-TV and later put online by Rochester’s Democrat and Chronicle. “The current system of AIM aid allocation is arbitrary at best — biased at worst — and certainly unfair to Rochester.”

Warren argues AIM aid should be based on need. She also argues that Cuomo’s incentives don’t work in cities that have already consolidated agencies and worked to make government more efficient.

“…[O]ur ability to take advantage of this new funding paradigm is extremely limited, and some might say that we are being punished for being ahead of the curve,” she writes.

Cuomo’s administration has also continued an emergency deficit-reduction scheme that takes school funding out of the hands of municipalities. To close a large deficit during the recession, Paterson’s administration in 2010 created a Gap Elimination Adjustment, which basically cut education aid to municipalities to help plug the hole. Though the state has hacked away at this debt during a nationwide economic recovery, Cuomo has continued putting the reduction in aid in his budgets.

Yonkers Mayor Nick Spano is an ally of Cuomo and in a recent phone interview credited the governor for working with him to fill a $55 million gap in education funding because of an accounting error. But Spano said GEA needs to stop and estimated that Yonkers lost $100 million because of the reduction.

“It’s something that the state really needs to address,” he said. “If I don’t get the proper funding then the only thing that happens to us is our kids end up with larger classroom sizes and they end up with a loss of programs that are vitally important to their future … maybe not reading, writing and arithmetic, but some of the extras: music, art, and sports.”

On top of the GEA, Cuomo’s property tax cap–a policy achievement he often touts–has limited cities’ ability to raise taxes to pay for education. The property tax cap compelled towns and cities to come up with a way to pay for education without raising property taxes more than 2 percent or the rate of inflation. Cuomo says the cap was “an historic success” and has been extremely effective in reducing taxes for homeowners.

But the success of the cap is questionable because in some instances, like Yonkers, the property tax cap merely forced a hike in income taxes. Municipalities can vote to override the state’s property tax cap (Of about 700 districts, 23 attempted in 2014 and 27 last year.)

In an op-ed in The New York Times earlier this year, Yonkers Mayor Stephanie Miner wrote about how tough it is on cities dealing with less revenue. “Revenue in cities like mine has plummeted, and not just because of the Great Recession. Municipal aid and school aid have been cut or have stagnated in recent years,” she wrote. Decrying the provision of “billions of dollars’ worth of corporate tax breaks” she added: “The state has offered, and the cities have accepted, fiscal gimmicks like borrowing money or using one-time revenue to pay for operating expenses.”

The incumbent’s agenda

While running for governor in 2010, one of Cuomo’s big plans for how to save struggling Upstate cities was to create a high-speed rail lines between Upstate cities and New York City, Montreal and Toronto. Immediately after taking office, he wrote a letter to the federal Department of Transportation asking for money and Albany passed a bill creating a high-speed rail board. But Capital New York reports the board never met. There’s been no action on the issue since.

Cuomo’s new agenda book does not include anything on the high-speed rail, but instead includes one paragraph on his transportation plans: “We must reimagine and transform our major transportation hubs, such as the MTA and our airports, which are vital to economic growth. These will be unveiled over the course of the next several weeks.”

So far, he’s announced a $500,000 design competition to upgrade John F. Kennedy and LaGuardia airports, but other plans will likely be announced after Election Day.

Fighting unemployment was a part of his first-term agenda and state Sen. Gustavo Rivera, a Cuomo supporter, says the governor has done good things for the Bronx, which has the highest unemployment in the state.
Earlier this year, Cuomo created an Unemployment Strikeforce that began with a pilot in the Bronx and will expand to three other counties with high unemployment.

“In the Bronx, this investment will be aimed at connecting individuals to jobs and training in six high-demand sectors: Healthcare, Information Technology, Office and Administration, Transportation and Warehousing, Sales, and Hospitality,” reads Cuomo’s press release.

But another policy change that would affect the lives of thousands of undocumented youth in the state’s urban areas, including the Bronx, failed under Cuomo despite him professing his support for it.

Recently, Cuomo visited the Bronx to rally with local elected officials and talk about his trips to Puerto Rico and the Dominican Republic. His speech was interrupted by CUNY students demanding the governor pass the Development, Relief and. Education for Alien Minors (DREAM) Act, which would give immigrants who served in the military or completed a four-year high school in the United States temporary residency so they could apply for tuition assistance and scholarships for college. Cuomo responded by saying he would work to pass the DREAM Act. But many critics of the governor have accused him of not putting his full weight into pushing it and blame him for it’s failure.

When asked if he thinks Cuomo has been genuine in his support for the DREAM Act, Rivera sidestepped the question. “We need to have a Democratic majority that is stable … to be able to pass it,” he said.

What’s ahead

If Cuomo is elected, tension between Albany and New York City over municipal control versus state control could heighten. After a bruising universal pre-K fight where Mayor Bill de Blasio wanted permission from Albany to raise taxes on wealthy residents to pay for pre-K, there are a couple other fights that are beginning to surface. De Blasio wants Albany to give New York City permission to raise the minimum wage. He also campaigned on repealing the Urstadt Law, a law that gives the state control over New York City’s rent rules.

Cuomo has been vague on whether he favors repealing Urstadt and his campaign did not respond to a request for comment on the issue.

Astorino did not respond to a request for comment on those issues either.

Hawkins is in favor of repealing Urstadt.

“It’s crazy to have Upstate rural guys deciding rent laws,” he said.

Compared to the dysfunction of government in Albany in the years before Cuomo took office, it’s clear his biggest accomplishment has been his ability to get pieces of his agenda — and the budget — passed when he puts his weight into it. For the next four years, some city executives are hoping he can do the same for them.

“They have gotten their fiscal house in order and now for the next four years, I’m hopeful that now they’ll shift their direction to the cities of New York and help us get our fiscal house in order,” said Spano.

  • Anon resident

    There is no urban policy. Just look at Atlantic Yards and how screwed up the ongoing dealing with Empire State Development where there is no plan of action.