New York’s economy has seen several rosy years in the decade since the Great Recession, with a run of steady growth, increasing job numbers, rising wages, and reliable tax revenue that has defied historical trends -- and led to growing city and state government budgets. But 2019 may be the peak of that economic swing as economic experts predict a long-expected slowdown to set in before 2020. New York City, the experts say, seems better equipped to weather any adverse effects of slowing growth and the state may struggle, presenting some hard choices for Democrats who will fully control state government come January and have a long list of priorities, some of which have financial costs attached.

The state budget remains far more precariously placed in the case of a downturn, even though one isn’t expected to hit soon. The governor has reiterated in recent months that he will continue to abide by a self-imposed 2 percent limit on increased annual expenditures, which presents little wiggle room to add major spending initiatives, though it remains to be seen if the governor will employ one of his many budget maneuvers to obscure actual spending increases. For instance, the State Fiscal Year 2019 budget, which began April 1, included a provision that funnels Payroll Mobility Tax revenue directly to the MTA instead of going through the state, effectively shifting $1.5 billion out of the budget.

“Part of the problem is they’ve technically abided by it but they’ve only done that by shifting things around and reclassifying things, not necessarily through stringent cost controls,” said David Friedfel, director of state studies at Citizens Budget Commission, a nonprofit watchdog. “The more they play those tricks, the harder they will be to find in the future if that’s how they choose to close the gap.”

Mayor Bill de Blasio’s plan to deal with New York’s public housing crisis will involve $24 billion in vital repairs using capital funds, he said Wednesday.

According to de Blasio, NYCHA 2.0 will feature three new programs.

Build to Preserve, he said, will deliver roughly $2 billion in capital repairs through new development on NYCHA land, while Transfer to Preserve will deliver about $1 billion in capital repairs through the sale of air rights. Fix to Preserve, he said, will improve services, infrastructure maintenance and immediately address health and safety problems including heating, mold, pests and lead.

Carol Kellermann, president of the watchdog Citizens Budget Commission, said shifting to mixed-income "infill" development and selling air rights will enable NYCHA to maximize the value of its land assets and raise billions of dollars for capital repairs.

NYCHA 2.0 “provides a solid blueprint for NYCHA's turnaround, but its success still depends on additional actions from the federal, state, and city governments and labor unions,” Kellermann said.

New York should not count on a big pot of revenues from marijuana legalization – at least not right away – according to an analysis by the Citizens Budget Commission.

The state has projected that it could see about $700 million in sales tax revenues from marijuana. However, the CBC report cautioned the state from trying to spend that money just yet, as it will take time for the market to develop should pot be legalized.

Washington and Colorado brought in $430 million and nearly $265 million, respectively, from marijuana sales in their most recent fiscal years. Oregon has seen $92 million followed by Nevada with nearly $72 million and Alaska with $13.5 million. The states have taken a variety of approaches to how it spends the money. Colorado has earmarked about half for school aid and half for public health and substance abuse programs. Washington puts about half into the health fund, one-third into the general fund and the remainder to other public health services, according to the report.

However, the CBC cautioned about some potential pitfalls. Oregon has seen a glut of production, which has driven down prices and therefore tax revenue. The state has stopped accepting new applications for marijuana growing applications.

An independent fiscal watchdog report seeks to harsh the buzz of those who think the state stands to make major bucks early off the legalization of marijuana.

The Citizens Budget Commission also warns against earmarking pot revenue for such purposes as fixing the subways.

“It will take years to fully realize a robust legal recreational marijuana market and associated tax revenue,” the CBC says in its report released Thursday. “If New York does implement such a program, the associated revenue must be cautiously forecast, transparently disbursed, and utilized for general state operating purposes.”

Gov. Cuomo earlier this year formed a committee to help develop legislation to legalize pot that he hopes could come up for a vote at some point during the 2019 legislative session. Lawmakers say they expect the governor might include the measure in his proposed state budget due to be unveiled in January.

The news that Amazon will bring some of its operations to Long Island City in Queens, with a promise of creating 25,000 jobs, brought pushback from some politicians and neighborhood advocates. They are concerned about how Long Island City will change and question the amount of financial incentives offered to Amazon.

In the face of opposition to the deal, Gov. Andrew Cuomo issued statements and participated in a round of media interviews to talk about Amazon’s decision.

So Amazon’s deal with New York state is not unique?

The state offered Amazon up to $1.7 billion in benefits and New York City offered up to $1.8 billion, according to an analysis from Citizens Budget Commission. In general, the value of the benefits grow with the number of jobs created by Amazon.

The state is offering up to $1.2 billion in tax credits from the Excelsior Jobs Program and a capital grant of up to $505 million, according to the state Division of Budget. The Excelsior credits are tied to Amazon’s commitment to create 25,000 jobs and invest $2.3 billion. The capital grant is tied to that initial commitment and also further milestones: up to 40,000 jobs and $3.6 billion in total investment.

The first of several New York City Council public oversight hearings on the deal to bring an Amazon campus to Long Island City will be held Wednesday at City Hall. Titled by the Council as “Exposing the Closed-Door Process,” the questions should concern not just the big-picture issues but also some fine print regarding the company’s acquisition of city-owned real estate.

Of course, the estimated $3 billion in tax breaks and subsidies in the deal made among Amazon, the state, and the city deserve scrutiny, though, except for a state capital grant that could reach $505 million, those questions -- as Gotham Gazette previously reported -- mostly concern revising existing policy.

For example, the Citizens Budget Commission warns that "offering Amazon benefits that go well above the current cap and expiration date" of the Excelsior Jobs Program -- up to $1.2 billion in state tax credits -- "sets a concerning precedent.”

As New York aims to rehabilitate New York City’s dilapidated subway system and make badly needed repairs to the state’s roads, bridges, ports and airports, it is confronting sky-high construction costs. That means changing the prevailing wage, expanding public-private partnerships, loosening restrictions on design-build and reforming the Scaffold Law will likely be debated in the upcoming state legislative session as ways to cut costs and make big projects happen.

Some advocates say that New York should go a step further and adopt full-fledged public-private partnerships – which can go beyond the relatively limited design-build process by continuing the involvement of a private entity after construction – since their use is only authorized for certain agencies. Proponents say that such partnerships – also known as P3s – allow for greater innovation in public works and can also improve quality. It remains to be seen how strongly Cuomo will push for an increase in public-private partnerships in next year’s budget negotiations, but progress on the issue would be a welcome development, according to Jamison Dague, director of infrastructure studies at the Citizens Budget Commission. “I would hope during the next legislative session that you see an acknowledgement that it’s time to untie the hands behind the back of these folks managing large capital investments,” he said.

New York's education lobby — including unions, superintendents, school boards and PTA members — wants the state to pitch in an additional $2.2 billion in school aid next year.

The request, which would bring state school aid from $26.7 billion this year to $28.9 billion during the 2019-20 year, comes even as the number of students in New York state is steadily dropping.

The overall statewide decline is exacerbating what some say is an imbalance in the way state aid is given out.

“The underlying Foundation Aid formula is warped,” said David Friedfel, director of state studies at the Citizens Budget Commission fiscal watchdog group.

Overall, Friedfel believes that too much of the aid goes to relatively wealthy districts that can rely more on property taxes to support their schools, and too little goes to poor districts, where there is less property wealth and, often, poorer students.

Another complication comes with “hold harmless” provisions in state law that mean no district gets less, even if its students numbers are dropping.

For instance, Friedfel pointed to state records showing that the Albany district has grown by about 16 percent between the 2006-07 and 2016-17 school years.

The Berne-Knox-Westerlo district in the rural Hilltown region of Albany County, however, decreased by about 30 percent over the same period.

Officials in Mayor Bill de Blasio’s administration have trumpeted New York City’s healthcare savings program.

Budget watchdogs pass it off a series of accounting tricks.

The Independent Budget Office and Citizens Budget Commission raised red flags to the de Blasio initiative at a recent joint meeting of the City Council’s committees on finance, and civil service and labor.

In June, the administration and the Municipal Labor Committee, an umbrella group of city labor unions, announced a commitment to generate $1.1 billion in employee healthcare cost savings over fiscal 2019 through 2021, supplementing $1.3 billion in recurring savings generated under a $3.4 billion savings agreement for 2014 through 2018.

Ilse Hoffman is a passionate recycler. Years before the city rolled out its brown bins as part of its ambitious curbside organic-waste pickup program, Hoffman carried her food scraps to the drop-off point at the Union Square Greenmarket. All the while, as treasurer of the 388-unit Georgetown Plaza co-op at 60 East 8th Street, Hoffman was agitating to convince her fellow board members to sign up for the curbside organics program. A few months ago she carried the day, and the city’s Department of Sanitation (DSNY) delivered brown bins to the co-op. Today, Hoffman’s original elation is shading toward disappointment.

Unfortunately, Hoffman’s experience is not uncommon. The DOS announced earlier this year that due to low participation it was halting expansion of the curbside program, which it had hoped to offer citywide by the end of the year. Testifying before the city council, Ana Champeny of the nonpartisan Citizens Budget Commission noted that low participation levels have led to “unreasonably high” collection costs. It now costs $1,700 to collect a ton of organic waste; $686 for recyclables; and $291 for regular garbage.

The Citizens Budget Commission is urging the Governor to veto a number of bills on his desk that would expand public employee and retiree benefits. We broke down the bills and their impacts with David Friedfel, Director of State Studies at the Citizens Budget Commission.

Residents of the city’s co-ops and condominiums might soon have reason to rejoice. Ditto owners of one-, two-, and three-family homes – if the panel studying an overhaul of the city’s much-maligned property tax system adopts a new recommendation from the independent fiscal monitor Citizens Budget Commission, Bloomberg reports.

The nonpartisan group has proposed a “comprehensive redesign” of the system that would shift co-ops and condos from Class 2 into Class 1 with one-, two-, three-family homes, which face a lower effective tax rate. Effective tax rates would be increased for residential rental buildings (Class 2), utility properties (Class 3), and commercial properties (Class 4).