Gov. Cuomo Proposes Ambitious Agenda While NY State Faces $6-Billion Deficit

John Jordan | January 2020

Gov. Andrew Cuomo delivered his 10th State of the State address on Jan. 8 in Albany.

ALBANY—With the specter of a $6-billion shortfall facing New York State this legislative session, Gov. Andrew Cuomo delivered his 10th State of the State Address on Jan. 8 that featured a host of new initiatives, including a $3-billion environmental bond act to fight climate change, a renewed call for legalized cannabis, as well as infrastructure and economic development investments including a new Empire Station Complex and a reimagined Erie Canal.

The governor’s agenda also includes plans to expand the free college tuition program, offer protections for gig economy workers, paid sick leave and tax cuts for middle class New Yorkers and small businesses.

“Our ship of state is stronger than it has been in decades, but the ocean we navigate is as tempest tossed as we have seen. Waves of anxiety, injustice and frustration are being fanned by winds of anger and division, creating a political and social superstorm, but these are the times when New York is called upon to show leadership and set a course for a troubled nation,” Gov. Cuomo said.

Among the numerous proposals detailed in the State of the State message, the governor touted his proposed $3 Billion “Restore Mother Nature” Bond Act, which the governor termed as the nation’s most aggressive program for habitat restoration and flood reduction that will be funded in part by the bond act.

The governor is proposing legalizing cannabis, creating a new Office of Cannabis Management to oversee the medical, adult-use and hemp programs. The proposal limits the sale of cannabis products to adults 21 and over and establishes stringent quality and safety controls including oversight over the packaging, labeling, advertising and testing of all cannabis products. These efforts will be done in coordination with the neighboring states of Connecticut, New Jersey and Pennsylvania. The governor will also propose creating a first of its kind Global Cannabis and Hemp Center for Science, Research and Education with SUNY and other partners.

Other real estate/economic development/business proposals offered by the governor include reducing the corporate tax rate for small businesses from 6.5% to 4%; tripling the current income exclusion for farmers and sole proprietors; making the investment tax credit refundable for farmers; and repealing the penalty on S corporations for underpayment of estimated taxes.

Another initiative calls for the continuation of a multi-year effort to lower Personal Income Tax rates for middle-class New Yorkers. In 2020, the third year of the multi-year tax cuts enacted in 2016, income tax rates have been lowered from 6.85% to 6.09% for taxpayers in the $40,000-$150,000 income bracket, and to 6.1% in the $150,000-$300,000 income bracket. These cuts are expected to save New Yorkers over $1.8 billion this year. Furthermore, income tax rates will continue to drop to 5.5% for taxpayers in the $26,000 to $150,000 tax bracket and 6% in the $150,000-$300,000 bracket. When the cuts are fully phased in, middle class taxpayers will have received an income tax rate cut up to 20%, amounting to a projected $4.2 billion in annual savings for six million filers by 2025.

Two other significant proposals involve expanded efforts to improve Penn Station and upgrade the Erie Canal.

The governor has proposed to redevelop the full city block south of Penn Station to add rail capacity. The expansion would increase overall track capacity by nearly 40% by adding at least eight new tracks to the existing 21 tracks, dramatically increase passenger terminal capacity, ease congestion with widened sidewalks and prominent subway entrances and add new development opportunities on adjoining parcels that will transform the area. As part of this plan, the governor further proposes to explore acquiring the Madison Square Garden Theater to create a new 8th Avenue entrance to the existing Penn Station. Together, these actions will combine the Moynihan Train Hall, existing Penn Station and the block south of Penn into an interconnected Empire Station Complex.

Gov. Cuomo is recommending the New York Power Authority approve a $300-million investment over the next five years at the board’s January meeting. A $100-million economic development fund will be invested in communities along the Canal and a separate $65-million investment will be devoted to solutions that will help prevent ice jams and related flooding in the Schenectady area. The remaining $135 million of the plan’s funding will subsequently be allocated to research recommended by the state’s Reimagine Task Force, as well as to solutions related to flood mitigation, invasive species prevention and ecosystem restoration.

Other staples of the governor’s platform in 2020 will be funding for affordable housing and to help stem the increase in homelessness in New York State.

“This year, I will propose that we commit the largest amount of funding in the history of the State of New York to help the homeless and build affordable housing. That is who we are, that is what we believe, that’s what we stand for. But we will also honor the state’s constitutional responsibility and demand a higher level of competence and skill and professionalism from local governments because without the right programs, the money will be wasted and the travesty will be continued.”

The Governor is proposing a first-in-the-nation domestic terrorism law to include mass violence motivated by hate, creating a new A-1 class felony punishable by up to life in prison without parole. The governor is also calling for New York schools to add a curriculum that teaches civic values and the state’s history of diversity and religious freedom. The Battery Park City Authority will develop a plan to expand the Museum of Jewish Heritage on the Holocaust to be a learning destination for school children across the state

The governor in listing some of the major economic development projects underway in the state, mentioned the highly-anticipated LEGOLAND New York project currently under construction that is scheduled to open this spring.

“LEGOLAND coming to the Hudson Valley, 1,300 jobs. I love LEGOLAND. Yes kids, that is your next vacation, we’re going to LEGOLAND,” the governor said.

John Jordan
Editor, Real Estate In-Depth