Budget Process Continues to Expose Governor Cuomo

 Different story this time around (cnn)

Different story this time around (cnn)

New York State is still without a budget and will likely remain so for the immediate future.  The Senate has left for its Easter Break, though the Assembly remains (unpaid) in Albany for now. They have collectively passed an emergency extender for two months, but there is a lot of bad blood circulating in Albany over why a budget agreement hasn't been struck.  As I laid out in last week's blog, the problem can largely be placed at Governor Cuomo's door.  Despite attempts to blame the uncertainty of the federal budget or the major differences between priorities in the legislature, the Governor can't distract anyone from his lack of leadership in a changing political landscape.  Housing shows why.

Given the affordable housing crisis gripping New York (primarily in NYC but not exclusively) major state action has been needed for a long time. Over the last few years, Governor Cuomo has happily stepped up to the microphone with grand proposals for addressing the crisis head on.  He has talked about turning JP Morgan settlement money over to homeless programs.  He has talked about reforming the controversial 421a tax program. And most famously, he has outlined an ambitious 20-year, $20 billion affordable housing plan. These grand promises were met with a lot of support, particularly from wary housing advocates.

However, almost none of these promises have been kept or even outlined in detail. Instead, we've seen the Governor feud with Mayor de Blasio by withholding state funds for housing. We've seen him spike a deal at the last minute on a revamped 421a plan the Governor himself proposed called Affordable New York. And we've seen almost none of the billions of dollars of funding called for in his plan allocated to affordable housing projects.

All of this posturing could be viewed as the Governor wielding considerable power over the political mechanics of the state, in a presumed ramp up to a 2020 presidential run. In reality, it has revealed a politician weakened in a new landscape, mired in his own contradictory impulses, and exposed for lacking a strong political base. Who is the Governor's core constituency?

The Governor has tried to please the strong downstate progressive element of his party in the Assembly while also trying to please the powerful, more conservative, developer interests aligned with upstate Republicans in the Senate. This balancing act works when the stakes are lower or when the issues are unrelated. 

The Governor can come out in favor of issues like gay marriage or anti-fracking because they don't impact developers' bottom line.  He can come out in favor of 421a reform, over the objections of many housing advocates, because it can be framed as an affordable housing mechanism even though it is largely a tax giveaway for large developers.

It doesn't work when those two worlds collide, which is what is happening over housing in budget negotiations. This budget requires some hard compromises on housing that simply can't match the Governor's promises to progressives and conservatives.  It doesn’t appear that the Governor anticipated the political environment he was entering, or at the very least, how this new environment would force him to make choices that he could previously avoid.

As of Wednesday, these negotiations have collapsed and state legislatures have walked away from the process without a deal. I don't want to suggest that housing is the only issue holding up the budget, but the issue shows how the Governor's leadership style has led us to this moment. 

Building housing in New York is difficult. Building affordable housing in New York is really difficult. These realities are partly structural - there are so many local variables, policies, and market forces that clash with each other that its nearly impossible to streamline a single affordable housing initiative. But these realities are also political. It's not impossible to pass a cohesive plan that addresses these structural issues, but it means pissing off somebody. Or lots of somebodies. 

Some politicians thrive under those partisan circumstances and some political systems even incentivize that type of style. Governor Cuomo is not that politician and New York State is not that system.  

That is the worst thing in the world necessarily.  There is something to be said for being a steely-eyed dealmaker and there is something to be said for a system that operates through old-fashioned power brokering rather than ideological extremism. Indeed, the previous six budgets during the Governor's reign have been passed on time and without going over major fiscal cliffs. 

However, over the years this has meant the “Three Men in A Room” style of governance involving the Governor and now disgraced Senate majority leader Dean Skelos and Assembly Speaker Sheldon Silver.  Both men were removed from office and convicted of federal corruption charges, radically altering the political landscape. Albany has always had the stink of corruption, but these developments, some of which have creeped into the Governor’s orbit, have undermined much of the Governor’s standing and power.

This ethical gray zone is largely why Governor Cuomo has maintained considerable control over Albany over two terms, with a hoped for third term on the way in 2018.  He has been able to strike deals in the legislature that have avoided big flair ups between parties by relying on his ability to maneuver in back rooms. But that is not the case anymore. (Although ethics reform has taken a back seat in this budget process.)

Without his fellow leaders to keep reigns on the political process, the Governor doesn’t have the type of cover he once relied on and it shows.  It is now up to him to make tough policy trade-offs in a much broader political arena than he is used to.  He has lost the initiative in crafting the budget process and can no longer control each chamber as he once could.

This isn’t lost on the Governor. His comments on the 421a negotiations show an almost child-like surprise that there are other motivations in politics than triangulation: “What we’re down to is truly ideological issues. 421a is an ideological, philosophical issue.”  Evidently, this is the first budget season where the Governor has had to consider actual political theory.

This openness has led to some truly bad ideas coming out of the negotiations, including linking 421a to rent regulation laws (which come up for renewal again in 2019.)  The Governor has come out against this line of thinking and it seems unlikely that a deal like this would be struck, but it shows that whatever deal does get done, Governor Cuomo will likely face the unpleasant realty of owning a divisive budget that he ultimately had less control over than his previous budgets.

How this will impact the Governor’s fortunes in 2018 let alone 2020 are unknown at this stage. But what is clear, and dispiriting, is that the housing crisis will continue, and many struggling New Yorkers will not get the help promised by the Governor so many times before.