Following the recent conviction of Governor Andrew Cuomo’s longtime aide Joseph Percoco on corruption charges – a humiliating blow for a governor who once campaigned on a promise to reform Albany – Cuomo quickly sought to shift attention from the executive to the legislative branch.

A day after Percoco was convicted of fraud and soliciting bribes, Cuomo called for ethics reform – in the Assembly and Senate.

Government watchdogs, and a few elected officials, hope the trials will give renewed momentum to long-stalled proposals for a range of reforms.

“I think the most important questions are ones not only about how the state can prevent future wrongdoing, but also what investments make sense for the state going forward, which may or may not come out” of the trials, said David Friedfel, director of state studies for the Citizens Budget Commission. Corruption or not, there have been ongoing questions about the Cuomo approach to economic development spending.

Dr. Mitchell Katz, who took over as CEO at NYC Health and Hospitals in January, plans to address the public health system’s fiscal woes by spending his money where it counts the most.

Katz, who testified at a City Council hearing last week, signaled an end to the payroll-slashing strategy of recent years, in which the system let the number of doctors and nurses dwindle through attrition. Instead, Katz plans to invest in primary and specialty care with an eye toward attracting patients discouraged by long wait times for appointments. For openers, he committed to hiring 55 primary care clinicians.

But spending more on clinical care won’t solve all of Health and Hospitals’ problems, said Mariana Alexander, a research associate at the Citizens Budget Commission. The health system must begin difficult conversations about services and facilities that need to be restructured, she said.

“I don’t really see how they’re going to find the cash to do this,” she said. “If they’re going to increase [the] service provision, they’re going to have to have decreases elsewhere.”

Katz isn’t new to financial turnarounds. He formerly ran the Los Angeles Department of Health Services, which operates four county hospitals that care for the uninsured. He reversed a $177 million deficit in 2010 into a $247 million surplus in 2015 largely due to of improvements in the payer mix because the hospitals treated fewer uninsured patients. That success was helped by California’s Medicaid expansion under the Affordable Care Act, the CBC said.

As the New York City Council continues to examine Mayor Bill de Blasio’s $88.67 billion preliminary budget for 2019, a newly created committee under Council Speaker Corey Johnson is paying extra attention to the ‘other’ budget - the capital plan - the administration’s proposed spending on schools, parks, jails and other long-term infrastructure projects.

Although fiscal monitors have generally praised the de Blasio administration’s handling of the city’s finances, the Council’s criticism tracks with reports by independent watchdogs that the city’s capital planning needs to be more efficient.

“Rightsizing and right timing the capital plan is necessary for a more effective and more transparent capital planning process,” stated a recent report by Citizens Budget Commission. “Reducing planned commitments in the early years of the plan to a more attainable level would require the City to clearly articulate its capital priorities and immediate needs. It would also facilitate improved tracking of capital projects and allow for more accurate projections of City borrowing.”

Senate Republicans nixed the funding streams for Gov. Andrew Cuomo's proposed $1 billion health care shortfall fund, but the Independent Democratic Conference and industry groups are celebrating anyway. In their view, a pot with no money dedicated to it is still better than no pot at all.

Even though the Senate's one-house budget would appropriate no new money for the shortfall fund, senators have proposed keeping the structure of the fund intact.

Another concern is that Cuomo's plan leans heavily on getting money from the sale of nonprofit insurer Fidelis to for-profit Centene for $3.75 billion, a move opposed by the Catholic Church, which oversees Fidelis. The Citizens Budget Commission, a business-backed, nonpartisan fiscal watchdog, said that receipt of this money is too speculative to be relied on so heavily to fund a part of the budget.

"These revenues are episodic and finite and should be used to bolster reserves or fund one-time costs after proceeds are received by the State," reads a CBC report released last week.

Gov. Andrew Cuomo has yet to embrace a plan to toll drivers to enter Manhattan's central business district, but he is doubling down on a more controversial subway-funding scheme that experts say targets New York City's tax base and, relatedly, the administration of Mayor Bill de Blasio.

Draft legislation acquired by POLITICO, which two sources say is being peddled by the Cuomo administration, would demarcate huge swaths of Manhattan and the Bronx as "transportation improvement districts," and allow the state-run Metropolitan Transportation Authority to take property tax revenue from those districts that it claims is generated by transit improvements as far as a mile away.

Also not a fan: the nonpartisan Citizens Budget Commission.

"The congestion pricing proposal appears to be moving too gradually to provide a significant new MTA revenue stream in the near term and I fear that the Value Capture proposal may become the more attractive vehicle for generating funding for the MTA — because, among other things, it doesn't impact anyone outside the 5 boros," emailed Carol Kellermann, president of the Citizens Budget Commission.

It’s just over a week until the state budget is due, and there’s no resolution on an array of proposed new taxes and spending proposals, as well as several unrelated items that are tied to the budget.

Gov. Andrew Cuomo has been holding private leaders meetings on the budget at the executive mansion.

Among the unresolved items — how to mitigate the partial loss of state and local tax deductions in the federal tax law approved by Congress and signed by President Donald Trump late last year.

David Friedfel, with the budget watchdog group Citizens Budget Commission, said it’s something that needs to be dealt with. He said New York could lose billions of dollars in revenue and some of the state’s wealthiest residents, who might choose to switch their primary residence to lower-tax states.

“This is a significant issue for New York, and it could be a real problem long term,” Friedfel said.

It’s been less than two months since Governor Cuomo’s Fix NYC panel unveiled a congestion pricing planthat would help fund dire upgrades to the state-controlled subway system, but instead of leaning into that proposal, Cuomo has decided to throw his support behind a different means of accruing capital.

As it’s etched out now, the plan would create a transportation improvement district in the area surrounding the completed portion of the Second Avenue Subway, as well as its hypothetical (read: unfunded) extension into Harlem and downtown.

“Transportation Improvement Districts should not include completed projects,” Carol Kellermann, president of the Citizens Budget Commission, commented to Politico. Kellermann also suggests that the districts should not extend more than a quarter mile from the site.

New York City Council members say the city’s massive capital program needs right-sizing.

The problem of appropriations far outweighing planned and actual spending has spanned several mayoral administrations, according to council Speaker Corey Johnson.

“This is not new,” Johnson said Tuesday at a joint meeting of the finance committee and capital budget subcommittee. According to Johnson, it marked the first council hearing dedicated solely to the capital program, for which the city sells bonds.

Sean Campion, a Citizens Budget Commission senior research associate, said capital commitments remain high and front-loaded. “In short, the commitment plan remains unrealistic in its ambition, obscures capital priorities and discourages accountability for completing capital projects efficiently.”

Campion called the preliminary capital commitment plan and its guiding 10-year strategy too large. Infrastructure repair, he said, deserves priority over questiomable economic-development initiatives.

CBC, according to Campion, wants capital plans linked to needs assessments.
Other problems, said Campion, include escalating debt; failure to consider the effects of maintenance or debt costs on the operating budget; insufficient data to track project-level spending; lack of asset-management policies for routine maintenance.

Gov. Andrew Cuomo has put forth an ambitious and controversial plan to help alleviate the impacts of the SALT deductions that a lot of New Yorkers have historically used.

Gov. Andrew M. Cuomo’s (D) plan to create two statewide charitable funds to mitigate the impact of the $10,000 federal cap on state and local tax deductions has picked up the support of a budget watchdog group in New York.

The Citizens Budget Commission released a report March 19 that endorses the plan and generally supports Cuomo’s idea for another way to avoid the cap—creation of a new voluntary payroll tax. The report urged the state to selectively decouple from the federal tax code and to take more time to review all the ramifications of the federal tax law.

The subways are crumbling. One of the reasons, as The New York Times reported in December, is excessive union staffing on Metropolitan Transportation Authority projects—far out of line with those anywhere else in the world.

There’s an elephant in the room of the city’s public-housing woes that the politicians don’t want to discuss: the role of labor unions