"New York state when you combine both the state rates and the rates in New York City has the highest top marginal tax rates on personal income," said Patrick Orecki, the director of state studies at the Citizens Budget Commission.

The state is flush with cash for now, but has an uncertain financial outlook over the next several years. New York's budget is expected to have a $6 billion budget gap by 2027 following hardships from COVID pandemic and federal aid running out.

"And that makes adding new recurring spending really, really difficult," Citizens Budget Commission Director of State Studies Patrick Orecki said.

It also suggested exempting certain small projects, potentially those with 200 or fewer apartments, from having to draft an environmental assessment statement. In September the Citizens Budget Commission made similar recommendations to speed environmental reviews and pre-certification.

Harris publicly said that the department would issue the guidelines before the end of 2022, and in September, speaking at an event sponsored by the nonprofit Citizens Budget Commission, she said they would be “a model that other states could follow” and would be released “in a couple of weeks.”

“We want a New York that’s better than before, and we want a transit system that adapts to new commuting power patterns,” said Citizens Budget Commission President Andrew Rein. “We’re going to have different patterns of people commuting different places, and we’ve got to be planning that way. We can’t be planning for 2019.”

The Citizens Budget Commission pointed to 20 bills that would spend money outside of the budget process. All told, the group is pushing for more than $76 million in vetoed spending.

"Granting targeted benefit enhancements not only increases costs, but also may encourage further expansions that also increase the public’s costs," the group wrote.

“Any building owner right now who thinks that they’re going to get away with a good faith effort claim but is not, right now in 2022, doing a lot of work is going to be, I think, sorely disappointed,” city Department of Environmental Protection Commissioner Rohit Aggarwala said at a November event hosted by the nonprofit Citizens Budget Commission.

Andrew Rein, president of New York’s Citizens Budget Commission, said the MTA has taken an important first step toward solving its problems.

“The MTA’s structural gaps remain huge and require immediate action and a multi-year, multi-party plan. The MTA’s efforts to begin identifying and addressing inefficiencies are important, welcome and helpful,” Rein told The Bond Buyer.

Still, they can and should go much further, he said.

“Efficiencies negotiated with workers should be a key part of the solution. Changing employment contracts can be very challenging, but this will be key to transforming the agency to reduce recurring costs without cutting services or jobs,” said Rein.

If owners don’t make a “good faith effort” to comply, as the DOB indicated in its proposed rules for the law, they could face fines of $268 for every ton of carbon dioxide emissions above the limit. The DOB has not yet defined what constitutes a good faith effort.

“Any building owner right now who thinks that they’re going to get away with a good faith effort claim but is not, right now in 2022, doing a lot of work is going to be, I think, sorely disappointed,” city Department of Environmental Protection Commissioner Rohit Aggarwala said at a November event hosted by the nonprofit Citizens Budget Commission.

Andrew Rein, president of the Citizens Budget Commission, said labor should work with the MTA to find ways to make the transit system run more efficiently.

“The bottom line is even when they roll up their sleeves and work with labor they still need help,” Rein said. “Nobody should be casual in the belief that the state has a magic money tree to divert money from other programs to fill the MTA’s gap.”

Rein also thinks state lawmakers should avoid raising taxes to find the money.

“We need a strong economy and a strong MTA and we can’t be pitting those against each other,” he added.

“They’ve started an effort to diagnose and rectify the inefficiencies and that is really important,” said Andrew Rein, the president of government watchdog Citizens Budget Commission. “It’s really welcome. It’s really helpful. But it’s not enough.”

Rein argued that the MTA must work toward overhauling its systems if it wants to achieve deep savings. One option would be to work with labor unions to, for instance, change how staff operate trains and buses. That is perhaps more feasible now that the MTA is expecting to negotiate a new contract with the Transport Workers Union Local 100 next year.

"There was no mention in their plans about collaborating with labor and changing how the MTA operates in certain fundamental structural ways, ways that are part of how you get the biggest efficiencies," Rein said. “You can't get to the magnitude that's possible here without working with labor."

“If you step back, all three [the state, city and MTA] are living on the tail of federal aid and the city and the state are living on the benefits of a really good last year on Wall Street,” said Andrew Rein, president of Citizens Budget Commission, a nonprofit fiscal watchdog. “So short term, it doesn’t look so bad. Mid- and long-term, there are really big problems…If there's a recession, those problems multiply.”

But, as Rein noted, the state has a structural budget problem. On top of that last gap of $6 billion, the state has budgeted for spending another $6 billion from federal aid and from a temporary personal income tax surcharge on top earners that expires in 2027. That could mean $12 billion in funding needs the year after that the state has not yet planned for. “The state has no effort underway to deal with education aid, or Medicaid, or state operations in any way that's going to reduce spending,” he said.

Rein expects that the MTA’s updated budget will include a larger efficiency plan, and CBC has its own recommendations that would find as much as $2.9 billion in savings for the agency. “That's really hard to achieve, that full amount or close to it, because it relies on working with the unions and changing contracts,” he said. “The unions have to be part of the solution.”

MTA Chair and CEO Janno Lieber has for some time been calling on state leaders to start funding the MTA as an essential service, like policing and schools, meaning rethinking how it factors into the annual budget cycle. But, as Rein said, the state faces its own budget risks. “There's absolutely no question that New York's economy depends on the MTA being successful. But we have to figure out how to balance the successes in New York. It can't come at the expense of devastating taxes or service cuts somewhere else,” he said.

Rein of Citizens Budget Commission noted that the projected budget gap of $2.9 billion for the next fiscal year “assumes that there's no new labor contracts that are larger than one-and-a-quarter percent or that there's no recession. Those are risky assumptions.”