When the history of substantive American political campaigns is written, don’t bother looking for New York’s 2010 gubernatorial contest in the index. Rarely has a state with so many thorny policy problems endured a campaign that dealt with so few of them. Jimmy McMillan’s ‘stache and Andrew Cuomo’s cojones (or lack thereof) got the ink that should have gone to the state’s pension system and jobs crisis. And Carl Paladino had as many hallway shouting matches with Fred Dicker as he did debates with his Democratic opponent.
The circus atmosphere was partly a product of the fact that everyone knew who was going to win, but now that the votes are counted is when the real suspense begins. Cuomo’s mantra during the “race” was that he wanted to build a mandate for the kind of sweeping change the Empire State desperately needs.
Beginning on Inauguration Day, New Yorkers find out whether he can deliver. Check that: whether and what he can deliver. Shielded by his huge lead in the polls and his main opponent’s stupefying bluster, Cuomo faced few questions and gave few answers on what specific policies he plans to pursue. Before the balloting,
City Limits dispatched its reporters to find out what Cuomo was and wasn’t saying on key issues. Here’s a preview of what to expect when Cuomo takes the oath:
When a former federal housing secretary runs for governor in the midst of a housing-triggered recession in the state where public housing began, does it mean new ideas are coming? Yes and no. There are plenty of worthwhile initiatives in the housing plans candidate Cuomo articulated, advocates say. But there were few bold ideas. And what is left out is as revealing as what is included.
In his campaign materials, Cuomo said he’d push to make the federal Low-Income Housing Tax Credit program—the bedrock of financing the development of affordable housing—more attractive to investors and would take a leadership role among governors to push Congress to fund the fund the National Housing Trust Fund, which Congress created in 2008 but never funded. If the Obama administration gets the amount it wants in the fund, New York State would see $111 million for affordable housing.
Foreclosures continue to roil the state, eviscerating gains in homeownership in black and Latino communities and draining the state’s tax base. From February, when the state banking department began keeping track, to October, 134,000 New York State homeowners received notice that their banks are beginning foreclosure proceedings. Cuomo said one way he would minimize foreclosures as governor would be by scrutinizing servicers to prevent faulty ones. In response to the number of vacant and abandoned properties that the foreclosure crisis has left in many communities, Cuomo said he’d establish land trusts—innovative, publicly controlled legal entities that can acquire and maintain large areas of vacant land and manage their return to productive use.
Advocates who have been beating the drum about the problem of overleveraged apartment buildings—properties bought for exorbitant sums during the real estate boom by owners who thought they could jack up rents on low- and moderate-income tenants—praised Cuomo for including plans to use the power of the state mortgage insurance fund and bank-regulating entities to push lenders to write down the debt on such buildings.
But like nearly all the proposals in his “urban agenda,” the role Cuomo envisioned for the state was primarily advisory or involved the application of influence, not the exercise of direct state government authority. In some areas—like federal tax credits—Albany has no direct power. But in others, Cuomo was simply silent about using authority the state might have: His blueprint, for instance, said nothing about Mitchell- Lama units being removed from the system or about protecting rent-stabilized tenants from harassment.
Rent regulation laws are up for renewal next year, and as ever, there will be a pitched fight between real estate interests and tenants over weakening or strengthening dozens of provisions. Tenant activists have been trying to repeal vacancy decontrol, the provision by which regulated apartments become market rate if they are vacated and the legal regulated rent reaches $2,000 a month, since it was reinstated in 1997. Cuomo has revealed nothing about how he’ll navigate those battles.
Cuomo’s plan was also mum on financing for public housing. The administration of Gov. George Pataki ceased all funding for operational expenses, and local housing authorities have been struggling to maintain their stock since.
Cuomo’s energy and power agenda was more than 23,000 words long, including footnotes, stretched out over 150 pages. But two words that never appeared in the document, together or separately, were hydraulic and fracturing. And while the document did discuss natural-gas drilling in other terms, the omission of hydraulic fracturing by name—hydrofracking for short—was notable.
The state’s next governor will preside over administrative decisions that could decide whether, how and where that drilling is allowed to take place, and for Cuomo, the debate is particularly sensitive: Power companies with a stake in natural gas were among his campaign’s largest contributors.
Proponents say drilling into the shale, which often involves pumping water and chemicals into cracks in the rock deep underground, could yield enough natural gas to change New York’s power landscape profoundly, providing plentiful fuel for power plants across the state and country while replacing coal, a dirtier resource, in rehabilitated older plants. Critics maintain that it threatens to poison groundwater wherever it occurs, including in the vast watershed that supplies drinking water to New York City. In his campaign literature and statements,
Cuomo indicated that he is seeking to maintain a tenuous balance—to encourage expanded natural-gas use, as he does in his power agenda, while ensuring that the gas is obtained in a way that does no harm to the environment.
“Because so much of our supply of energy is based on natural gas fuel, ensuring a supply of low-cost natural gas is important to New York,” his position paper maintained, adding that drilling could help the upstate economy and reduce the need for more environmentally destructive resources, like coal. Still, it added, “New York State must ensure that, if and when the shale’s natural gas is obtained, it does not come at the expense of human health or have adverse environmental impacts.”
New York’s energy market was deregulated in 1996, and consumers now choose among dozens of companies to provide their electricity. With power use expected to escalate over the coming decades, particularly in crowded downstate areas, companies are vying to build new plants and power lines and to develop new fuel sources—all endeavors that require state and local government approval. Cuomo’s energy plan made it clear that he likes wind and suggested that he opposes coal. He has also long said that he favors closing the Indian Point nuclear plant in Westchester County when its license expires in 2013. But Cuomo has made no specific proposal to replace the power Indian Point generates.
Cuomo’s four years as attorney general offer precious few clues about his preferences on energy. In 2007 he investigated five power companies seeking to build coal plants in other states, questioning whether their investors had been fully advised of the financial costs that their emissions could create. Beginning in 2008, he began cracking down on conflicts of interest involving local officials and wind power companies. And in 2009 he charged that Fortuna, a natural-gas-drilling company, had misled upstate landowners into signing unfavorable leases. The company settled and agreed to pay $192,000 to the state.
Two weeks before Election Day, aides to Cuomo said his education policy “book,” which would detail education reform policies in specific, was forthcoming. Voters went to the polls with no such report having been issued by the campaign. In his campaign policy book “The New New York Agenda,” Cuomo merely glanced at education reform—a startling gloss, given the issue’s prominence in Washington and Albany and at City Hall. It’s doubly startling given New York State’s second-round Race to the Top win and the political and financial support Cuomo drew from prominent pro-school-choice or pro-charter organizations like Democrats for Education Reform. Set against the context of his first run for governor in 2002, when Cuomo championed universal preschool and literacy as vital education efforts, the candidate seemed to have shifted his focus away from the classroom to matters economic.
Schools in New York are richly funded, Cuomo said during the campaign, but earn low marks for achievement. “We are No. 1 in spending in the nation and No. 40 in terms of performance,” he stated in the seven-candidate debate held on Oct. 18 at Hofstra University. To cure the funding excess, he proposes economies of consolidation and management and alleviating unspecified “unfunded mandates.”
Cuomo additionally said that competition, school choice and charter schools should spur school improvements, in line with New York’s Race to the Top win. But the recent rise in the state’s cap on the number of charter schools notwithstanding, the vast majority of students in the state continue to attend traditional public schools, and on those institutions, Cuomo articulated few specific policy goals.
He did, however, take up a theme made popular by outgoing city schools chancellor Joel Klein, the Rev. Al Sharpton and Newt Gingrich, among others. Cuomo asserted at the Hofstra debate that “inequity in education is probably the civil rights issue of our time.”
“The way we fund education, through the property tax system, by definition is going to be unfair. And it is.” Cuomo said. Because richer districts have more valuable property to tax, they can afford to spend more on their schools and their students than poorer district can.
Starting in 1993, the Campaign for Fiscal Equity pressed the state and thengovernor Pataki for sufficient funding to assure that all of New York’s public schools meet their legal (and moral) obligation to provide a sound, basic public education through high school, despite each district’s economic status. The resulting legislation, the 2007 State Education Budget and Reform Act, was designed to infuse more than $7 billion into state public schools over four years, of which $3.2 billion would be directed toward New York City’s neediest students, along with an additional $2.35 billion in foundation aid.
But budget stasis in 2009-10 froze CFE dollars two years into the plan and essentially extended the phase-in of funding from four years to seven, with payments anticipated to resume in the 2011-12 school year. Additionally, class-size reduction planning integral to the CFE lawsuit has been essentially abandoned by the NYC Department of Education, with the approval of state education commissioner David Steiner, after the DOE cited economic constraints. It is not clear if or when class-size reduction efforts will resume.
While Cuomo’s commitment to equitable funding is welcome, advocates say, it’s not clear where the moneys will be found to fulfill CFE’s legally mandated obligations, which the state has essentially permitted to languish unmet. There is also uncertainty about how Cuomo will cap local property taxes while also improving school achievement.
If the seven-member comedy act that was the Oct. 18 gubernatorial debate can be said to have had a serious message, it was most likely this: It’s the jobs, stupid. Amid the prostitution jokes, one of the most pressing questions of the night was how New York’s next governor plans to address an economic future that looks, by anyone’s reckoning, bleak.
Cuomo’s plan is described in the 224- page Agenda which features a 33-page chapter devoted to economic development. Among Cuomo’s promised reforms: A $300 million Jobs Now tax credit that would refund payroll taxes for any new employees hired by New York businesses and kept on the job for at least one year. Revamping the Empire Zone economic development program to focus on key growth industries. Subsidy recipients would be required to indicate how many jobs they promise to create. Those who achieve their goals would get subsidies equal to 80 percent of state income tax withholding for the new jobs; companies creating less would be subject to a clawback, forcing them to repay the subsidies on a prorated basis.
Reforming the state’s industrial development agencies, by instituting regional economic councils that would oversee development strategy and prevent local agencies from using state money to poach jobs from elsewhere in New York. Capping local property taxes and otherwise reducing regulatory and tax obstacles for companies wishing to move to New York.
Some of Cuomo’s proposals should please critics of the current subsidy system—the need for clawbacks, for example, has been a common refrain among development experts who say that too often, companies collect taxpayer dollars and then fail to supply the promised jobs. And two of his proposals—Jobs Now and his revamped Empire Zones—would encourage companies to create higher-wage jobs by tying the size of company’s subsidy to its level of employee pay.
Still, numerous questions remain as to how effective Cuomo’s proposals would be. For example, clawbacks may seem foolproof: If a company doesn’t meet its job goals, the state gets its money back. Yet the government must first ask for that money back—an unappealing option to public officials who don’t want to appear “unfriendly” to business. According to documents compiled by the subsidy watch group Good Jobs New York, Pfizer received $46 million from the New York City IDA in 2003 in exchange for creating 1,000 jobs. When the company instead announced layoffs, the IDA declined to implement the deal’s clawback provision, merely vowing to reject any Pfizer request for additional subsidies.
Some observers are also concerned that Cuomo’s close ties to many advocates and beneficiaries of traditional economic development deals will present a roadblock to significant change. Cuomo’s Upstate Business Advisory Council included such business leaders as Jordan Levy, who as chair of the Erie County Harbor Development Corp. opposed attaching a living-wage requirement to subsidies for a proposed Bass Pro superstore in Buffalo.
Cuomo has also received significant campaign contributions from major recipients of development aid in New York State. Jerry and Robert Speyer, who have given more than $100,000 to the Cuomo gubernatorial campaign, are principals of Tishman Speyer, the mega-builder that partnered with the NYC IDA for the new Yankee Stadium project.
—By Neil deMause