2021 New York State Budget Recap: Funding Education and Avoiding Problematic Policies

Last week New York adopted its Executive Budget for Fiscal Year 2022. This year’s budget was a few days late and negotiations were complicated by the ongoing pandemic, scandals surrounding the Governor, and shifting political dynamics throughout the State. What resulted was a budget that looked different in a lot of ways than what has typically been adopted during Governor Cuomo’s time in office. Here is a roundup of City Bar comments on proposed budget provisions and where those provisions ended up:

• Dedicated Funding Stream for Public Education. The Education and the Law Committee supported efforts to ensure the budget provided a significant and dedicated funding stream for public education, identifying the Shared Help Assessment to Rebuild Education (SHARE) Act, as one possible way to achieve that goal. That bill would have implemented a temporary personal income tax increase on New York residents earning more than $5,000,000 annually and dedicate the revenue to public education (and higher education). The Committee argued that the current need for greatly increased public education funding, while longstanding and clear, has been terribly exacerbated by the COVID-19 pandemic. The final budget accomplished the policy goals supported by the Committee by providing significant funding for education, including a commitment to fully fund the Foundation Aid (the formula that sends extra money to high-needs districts such as New York City) over a three year period.  

• Ensuring Broadband Internet Access for Students.  The Education and the Law Committee and Social Welfare Law Committee supported the inclusion of the E-Let’s Expand Access to Remote Now (E-LEARN) Act as part of their continuing work on their #Wifi4Homeless campaign. The E-LEARN Act would ensure that all children have access to broadband internet for their schooling for the remainder of the COVID-19 pandemic. Internet access is a critical resource for students participating in remote or blended learning. It is a particular need for homeless students, who lack reliable internet access in homeless shelters. While the final budget did not include the E-LEARN Act, it did include two measures related to combating the digital divide: the Comprehensive Broadband Connectivity Act, which directs the Public Service Commission to study broadband access across the state; and a mandate that low-income households receive low-cost broadband plans.

• Closing Juvenile Placement Facilities.  The Juvenile Justice Committee, Children & the Law Committee, and Council on Children supported a budget provision that would close 4 state-operated juvenile placement facilities and reduce the State’s investment in youth incarceration. The provision would authorize the Office of Children and Family Services to close the facilities in calendar year 2021, as part of the continued effort to right size the State’s juvenile justice system. Now fully implemented state-wide, Raise the Age reforms have contributed to a decade of declines in youth arrest, detention, placement and incarceration. The facilities identified have been chronically underfilled, with a total capacity of 142 beds and a total of 50 youth currently placed. The final budget provided for the closure of two of the four facilities (Columbia Secure for Girls and the Red Hook Non-Secure facility) but unfortunately did not include any provision for community based reinvestment as a result of cost-savings from those closures.

• Judiciary Budget and Civil Legal Services Funding. The Council on Judicial Administration called on the Legislature and Governor to accept the 2021-22 Budget Request of the Unified Court System in its entirety. The pandemic has severely strained court operations and has only created a greater need for sufficient access to justice. The Judiciary Budget was adopted, restoring cuts, including to legal services funding. 

• Mezzanine Tax. The Commercial Law and Uniform State Laws Committee, with the support of the Real Property Law Committee opposed budget provisions that would have amended the New York Real Property Law and the New York Uniform Commercial Code (NY UCC) in an effort to collect a new mortgage recording tax in connection with certain financing transactions on which there is credit reliance by the lender on the value of New York real estate subject to a senior real estate mortgage. The Committees opposed these provisions because they contained non-uniform and problematic amendments to the NY UCC. They further argued that the non-uniform amendments to the NY UCC were unlikely to produce additional revenue (due to the ease of avoidance), would damage the UCC, would reduce the availability or increase the cost of credit, and might prejudice settled transactions. The opposed provisions were not included in the final budget.

• Electronic Notarization. The Commercial Law and Uniform State Laws Committee and the Real Property Law Committee also issued a report opposing a budget provision that would provide for electronic notarization. While the Committees support the goal of providing much-needed notarial law reform in New York, they recommended against the approach proposed in the budget, arguing the provision as drafted does not meet its intended goals. The provision was not included in the final budget.