State Budget Includes Infrastructure Spending, Education, Ethics Reform
John Jordan | April 1, 2015
ALBANY—The New York State Legislature passed a $142-billion budget on-time budget on March 30 that includes some controversial education reform, campaign finance reform, as well as enhanced infrastructure spending thanks to $5.4-billion in bank court settlement revenue.
For the real estate industry, Gov. Cuomo earmarked some of the one-time bank funds for financing of the new Tappan Zee Bridge, and set aside $477 million for affordable housing and community development projects statewide. Another potential boost to the Hudson Valley economy, the Mid-Hudson region could win one of three $500-million revitalization funds that are being funded via the bank settlement revenue in the 2015-2016 state budget. While the state budget calls for some controversial education reform provisions, the budget increases state education funding by $1.3 billion.
“For the fifth year in a row, the State Budget holds spending growth below 2% and continues a record of fiscal discipline that has reversed decades of budgets that increased spending faster than inflation or personal income growth,” said Gov. Andrew Cuomo in a statement. “This $142-billion budget is the most meaningful that we have agreed to in many years, not because of what we are spending but because of how we are spending it. We are not just maintaining services and the status quo with this budget. We are investing in a new future for our state.”
New York State Association of Realtors CEO Duncan R. MacKenzie said, “The legislature’s successful passage of its the fifth consecutive on-time budget is notable once again for what it didn’t do, raise taxes. We were pleased to see the inclusion of ethics reform and increased school funding. From a real estate perspective it made no changes to the state’s real estate transfer or mortgage recording taxes and for that New York’s Realtors applaud their lawmakers.”
Local politicians and business leaders for the most part praised the passage of the 2015 budget. For example, Orange County Executive Steve Neuhaus said, “The 2015-16 budget holds spending growth in check, increases state aid to our schools by more than 6 percent, and establishes a transformative Upstate Revitalization Initiative, allowing Orange County to showcase our strengths through a competitive economic development process. Ours is a community on the move, and this budget enhances the tremendous gains we have seen in Orange County over the past year.”
Westchester County Executive Robert Astorino penned a column in the New York Post that was critical of the state budget. “We have major problems in New York, and this budget fails to address them in a transformative way. Nibbling at the edges is not ‘radical reform’ or a ‘new approach,’ as we were once promised. It’s simply more of the same and will do little to help the middle-class prosper and remain committed long-term to the state.”
Part of the spending of the $5.4-billion in bank settlement funding includes $1.5 billion for Gov. Cuomo’s Upstate Revitalization Initiative. Seven regions are eligible to compete for one of three $500-million upstate revitalization funds—Mid-Hudson, Capital Region, Mohawk Valley, Central New York, North Country, Southern Tier and Finger Lakes.
The budget invests $1.3 billion in the New York State Thruway system to keep tolls down while also implementing critical repairs and maintenance initiatives, and supporting the construction of the Tappan Zee Bridge and alternative transit options. It is believed most if not all of that funding will be earmarked for the Tappan Zee Bridge.
The budget includes $500 million to launch a statewide broadband program that leverages at least an additional $500 million in private resources to create the New NY Broadband Program. The program will incentivize private sector providers to expand high-speed broadband access in underserved and unserved communities.
A total of $400 million over four years is reserved to support debt restructuring and other capital projects for health care systems, including significant investments in rural communities to facilitate health care transformation.
The budget will support the development of four new Metro-North stations in the Bronx—Co-op City, Morris Park, Parkchester, and Hunts Point—to extend rail access to more than 93,000 residents living near the stations. The project will also serve one of the largest concentrations of medical facilities in the United States at the Morris Park station. The cost of the new line and stations are less than $1 billion, with the state investing $250 million of that funding, state officials noted.
Other sources for the bank settlement funding include: $150 million for counter-terrorism efforts and disaster prevention and response, $150 million for economic development projects on Long Island, $150 million for municipal restructuring, $65 Million in ports and rail hub infrastructure, $50 Million to transform the State Fairgrounds, and $50 million to expand and protect agriculture in the Southern Tier & Hudson Valley.
In terms of its affordable housing programs, the state budget calls for $229 million in traditional capital housing resources for 2015-16, an increase of $32 million over available resources in 2014-15, which continues the historic five year $1-billion House NY program initiated in 2013-14 to create and preserve more than 14,000 units of affordable housing statewide. The state’s investment also includes $248 million from the JP Morgan settlement proceeds to support various affordable housing and community development programs, including $100 million for critical repairs at New York City Housing Authority developments, $50 million for new middle income housing and renovations of existing Mitchell Lama developments, as well as support for mortgage assistance programs and programs targeted to the disabled, seniors, and veterans.
NYSAR Legislative Priorities
For the remainder of the legislative session, Realtors across New York State, including the Hudson Gateway Association of Realtors, will be pressing state lawmakers to enact real estate and consumer-friendly legislation. Among NYSAR’s legislative properties include: support of legislation to amend the real property law to define what constitutes a real estate “Team;” extending the Property Tax Cap that expires June 15, 2016; transparency and Disclosure in Co-operative Housing (A.1120 – Lavine); Vested Rights for Property Owners (A.1435 – Paulin); Mandate Relief; Increasing the Threshold for the Mansion Tax (A.79 – Buchwald; S.548 – Latimer); Exemption of Mortgage Recording Tax for First Time Homebuyers (A.2989 – Weprin); and Tax Credit for Installation of Fire Sprinkler System (S.2587 – Flanagan).
According to NYSAR’s website, the association also opposes the passage of any proposal that would increase state and local mortgage recording and transfer taxes, as well as a proposal pending before the New York State Fire Prevention and Building Code Council that would amend the building code to mandate the installation of fire sprinklers in all new one and two-family homes and townhomes in New York. The decision to install fire sprinklers should be a consumer choice or left to local municipalities, NYSAR states.
NYSAR’s Annual Lobby Day will be held in Albany on June 9th. Prior to the event, HGAR will release its own 2015 Legislative Priorities, which will be detailed in future editions of Real Estate In-Depth.