As federal corruption trials loom for several associates of Governor Andrew Cuomo, the administration is forging ahead with Buffalo Billion II, the second phase in an ambitious plan to revitalize Buffalo’s beleaguered economy and help transform Upstate New York into a hub of technology innovation and jobs. The first phase saw the massive alleged bid-rigging and kickback scandal that rocked state politics when outlined in September 2016 by the Manhattan U.S. Attorney’s Office and will loom over Cuomo’s 2018 reelection campaign.

“There’s two problems here. One is the corruption problem, which is obviously paramount in the upcoming trials,” said David Friedfel, director of state affairs for Citizens Budget Commission, a nonpartisan watchdog. “But a second problem that we’ve voiced concern about, which is sort of getting lost in the conversation, is that a lot of these are a bad investment of state taxpayer dollars.”

Under Bill de Blasio, the first Democratic mayor of New York City in more than two decades, the city has added more than 25,000 employees and spending has increased by nearly 20%.

Since he took office in 2014, Mr. de Blasio has made preschool free for all children, an initiative that costs the city about $300 million a year. He has added nearly 1,300 police officers at an annual cost of $75 million. He spent more than $300 million to launch citywide ferry service and $4 million to create a new agency to work with veterans.

Carol Kellermann, president of the Citizens Budget Commission, a watchdog group, said the mayor isn’t building enough reserves in the face of likely cuts in federal aid and the constant threat of an economic slowdown. “We are very concerned and have been,” she said. “The mayor is not showing any interest in additional fiscal discipline to address these factors.”

Gov. Andrew Cuomo wasn't on the 2020 presidential campaign trail, but it wasn't hard to imagine that he was.

Instead, it was August 2017. He was on a boat in the middle of the Hudson River with members of the media, giving a tour of the new $3.9 billion Tappan Zee Bridge replacement he had politicked his way into naming after his father, three-term governor Mario, approximately a month earlier.

Cuomo committed to keeping tolls across the bridge — currently $5 cash and $4.75 with an E-ZPass — flat until 2020. But many across the state are expecting a big increase as the Thruway Authority, which owns the bridge and funds itself through tolls, will have to pay for the bridge with that revenue.

A recent report from the Citizens Budget Commission said the toll could reach $10, though some speculate it be as high as $15. A two-year-old task force called to help set the toll has never met.

Mayor Bill de Blasio, Harlem Speaker Melissa Mark-Viverito and Council Member Dan Garodnick today announced a new bill that would make changes to the Commercial Rent Tax (CRT) aimed at helping New York City’s small businesses succeed. Effective July 1, 2018, the threshold for Manhattan’s CRT for businesses with income up to $5 million will increase from $250,000 to $500,000 annual rent, with the benefit provided on a sliding scale for businesses with income between $5 million and $10 million or paying $500,000 to $550,000 in rent.

This effort has received strong community support from elected officials representing Manhattan at the federal, state and local level, as well as various commercial and real estate organizations including the Partnership for NYC, the Citizens Budget Commission, Chinatown Partnership, the local Business Improvement Districts and the Manhattan Chamber of Commerce.

New York’s Metropolitan Transportation Authority board should reject the agency’s proposed $16.4 billion operating budget for 2018 unless new funding sources are in place, according to the watchdog Citizens Budget Commission.

Implementing the first phase of Chairman Joseph Lhota's proposed $1.5 billion subway improvement plan without additional revenues would turn the expected 2018 end-of-year cash surplus of $30 million into an end-of-year deficit of $498 million, said Jamison Dague, the CBC's director of infrastructure studies.

“The MTA board is being asked to approve a budget despite unanswered questions about sources of funding, possible reductions should a funding agreement among transit agency stakeholders not emerge, or both,” said Dague.

TANSTAFL: There ain’t no such thing as a free lunch or, in this case, construction of a bridge. At the end of the day, someone has to pay.

The Citizens Budget Commission report projecting that tolls on the new Tappan Zee Bridge will likely increase from $5.00 to $10.50 after 2020 comes as no surprise. It confirms what I previously predicted.

The city's most prominent budget watchdog wants the Metropolitan Transportation Authority's board to vote down its proposed $16.4 billion budget because too many questions remain about the origins of its funding.

ALBANY — A little noticed state program has provided $31 million in tax breaks to more than 30 firms since 2010 for producing more than 2,000 TV commercials, according to the program’s first annual report.
 
The program provides a 5 percent tax credit for expenses incurred in shooting commercials in New York. It allows an additional 20 percent “growth” credit against expenses if a production company increases spending from year to year.

Critics of the tax credits in general were particularly harsh in their judgment of the tax break for making commercials.
 
“The commercial production tax credit provides subsidies to an industry that has strong ties to the state and is already well-established,” said David J. Friedfel, director of state studies at the independent Citizens Budget Commission. “It is clear that companies are not being enticed to film here because of the credit, but are simply using it to pad their bottom lines at the expense of taxpayers. It is time to end these subsidies.”

New York’s “economic development” programs are a joke — spending that rewards a few connected insiders while rarely delivering much real growth, let alone jobs. But the Legislature keeps trying to launch new ones.
 
Three bills to do that (one on Gov. Cuomo’s desk, and two headed there) deserve vetoes. As the Citizens Budget Commission notes, “No new [‘development’] programs should be approved until reforms are put in place to improve evaluation, procurement and disclosure requirements and existing spending is effectively evaluated.”

New York City’s November budget update and four-year financial plan revealed millions in new savings that offset two-year spending, Mayor Bill de Blasio said Tuesday.

According to de Blasio, the city realized $234 million in new savings for fiscal 2018 and $238 million in new savings and $123 million in pension savings the following year. Spending, he said, will be up by $47 million and $59 million in FY18 and FY19, respectively.

Carol Kellermann, president of the watchdog Citizens Budget Commission, called the plan "a wait and see modification."
Kellermann cited numerous variables.

"The uncertainty about what will happen in Washington and the possibility that the economy may slow are not yet reflected in the current or outyear budgets," she said. "We await January's plan to indicate how the administration intends to address potential storm clouds on the horizon and to fund new initiatives the mayor has discussed."

In 2016, more than $11 billion worth of the bonds were issued in New York, according to the state Division of Budget.
It’s one example of the unseen but broad impact that the Congressional tax reform could have on the economy.

While much of the focus has been on personal tax deductions for state and local income taxes, or SALT, the sprawling tax reform bill being developed in Congress calls for changes in a number of areas, including the closure of numerous tax exemptions to help offset the federal deficit.

“It’s really serious. That’s going to really hurt infrastructure,”  Carol Kellermann, president of the Citizens Budget Commission, a financial watchdog group, said of the possibility of losing the private activity exemption.

New York Mayor Bill de Blasio’s ambitious goals to create affordable housing and fight income inequality will be tested by slowing economic growth, crimping his plans to win influence in the next presidential election.

Private jobs in the biggest U.S. city grew by 56,000 last year after gaining more than 100,000 annually since 2012. Tax revenue also climbed at a slower pace. Budget monitors and credit analysts expect a deeper slowdown in 2020, with increasing risks of recession. At the same time, the city’s four-year budget calls for spending to rise 13 percent by then to $96 billion.

The fiscal blueprint anticipates a 12 percent increase in salaries, pensions and benefits between 2018 and 2021, and a $2.3 billion deficit in that final year. De Blasio’s budget for the current year stashed a record $5.25 billion in reserves. Comptroller Scott Stringer, a group of city council members and others had urged him to put away even more. 

“We should be getting ready for tougher times,” said Carol Kellermann, president of the Citizens Budget Commission, a business-supported watchdog group.