Albany

Why New York Should Have a Constitutional Convention, But Still Needs the Feds

Not exactly what we had in mind (newamsterdamny.org)

Not exactly what we had in mind (newamsterdamny.org)

Since the election of Donald Trump, a lot has been made about the need for more localism.  With the federal government either locked in partisan paralysis or actively cutting back on services, there is a compelling argument for letting states run their own affairs – after all, states are the great laboratories of democracy.  However, we can look at the recent talk of holding a Constitutional Convention in New York to see why this argument is ultimately flawed.

There are two main reasons that localism can’t help improve how our cities/states are governed. First, our society has evolved into a highly complex, integrated national and global environment where the actions of distant players have local consequences.  We need a strong, active federal government to manage the needs of loosely connected people and places.  Despite what many would argue as too many onerous regulations from the federal government (on things like environmental policy), the larger trend over the last 40 years is the retreat of federal policy (on financial policy as one example), which has produced some of the greatest inequality in our country’s history.

Second, this assumes that states are functional enough to handle more responsibility, which is, sadly, not at all clear.  Part of this goes back to the first reason. Our economy and society are too complex and integrated for state-level governments to be able to address all of their citizens’ concerns. Even well run states can be left behind as the economy and demographics shift. But part of it is bad governance.  New York State is a prime example.

I’ve written a lot about the flaws within New York State’s governance (and though I’ve been highly critical of Governor Cuomo, most of those flaws are structural and not his fault per se.)  The quirks of history and geography have put a mostly rural state together with the country’s greatest city.  It has also separated commuters across three states that have more in common with each other than their other fellow citizens.  These issues are beyond the reach of a (state) Constitutional Convention, but show the limits to what a state can address.

However, here is a brief list of what could and should be fixed in New York.  These changes, along with many others certainly, could improve on the quality of governance in the state, but the larger point is to demonstrate that they still couldn’t address the larger trends that pose current and future problems for the state.

1.     One Full-Time Legislature

Many states have a two-body legislative system with part-time legislators based on logic from the US Constitution intended to spread out political power across regions and classes. The idea of the citizen-legislator has romantic undertones, but in practice it means you get an unprofessional class of elected officials who are ripe with conflicts of interest.  

The increasing nationalization of all politics and flooding of out-of-state money into local elections further undermines this quaint notion.  Post-election, lobbyist groups like ALEC often write legislation word-for-word in many states and provide funds and perks for many elected officials all to eager to lighten their load.

The "Three Men in A Room" Era of New York politics has been the opposite. Not only have two of those three people ended up in jail, but also the system made a mockery of both bodies of representation.  The dynamics of New York politics dictate that downstate voting power dominates the Democrat-led Assembly and downstate financial power dominates the Republican-led Senate. This unholy alliance works because we have too many weak legislators.

Paying professional politicians and staff to govern our state through one representative house would produce better outcomes with more transparency.  Singapore has shown how paying comparable private-sector salaries can improve the efficiency and efficacy of government.  We get what we pay for, and I’d rather pay fewer people more to do a better job. 

2.     Home Rule

Localism as it is described in many circles calls for cities to control more of their destinies in the Trump Age. That belies the fact that they can’t.  The US Constitution does not mention cities at all and empowers states exclusively outside of the federal level.  This means that a city like NYC doesn’t control its own transportation, taxation, or even education. 

The honest truth is that NYC is special (obviously I have fully embraced my NYC-centric worldview) and needs to run its own affairs.  It’s one of the world’s premiere cities and needs to have autonomy to run its own affairs to complete with global cities like London or Hong Kong.  That it can’t manage its sprawling obligations and opportunities as easily as Paris or London can costs NYC, New York, and the US. 

Some ideas have been floated for the Convention about returning limited home rule to NYC or as radical as creating autonomous regions (see the picture above) or even succession.  If there was some compromise that cut out a special designation for the 5 boroughs given its unique nature, but would still guarantee some upstate financial exchange - that might just work. But if such a scenario that could benefit both the city and the rest of the state (and the rest of its cities) even exists remains to be seen. And I for one don't want to create a scenario where one region suffers because the other separates.

Furthermore, it’s unlikely that upstate communities would want to surrender access to NYC tax dollars. More importantly, it’s unlikely that upstate politicians would want to surrender access to downstate political money, which would evaporate if upstate influence wasn’t needed.  And no governor, certainly not the current one, would want to surrender the power, and access to the spotlight, that NYC provides. 

3.     Debt Service

Technically, this is more about transparency, but how the state borrows money is in need of a major overhaul.  Right now the Constitution says that voters must approve any state borrowing over a certain amount but that hasn’t happened in decades.  This is because most state borrowing comes through sub-state authorities and agencies that are explicitly exempt from voter referendums. 

Many elected officials, including at one time Governor Cuomo, have criticized this “back-door” borrowing but when push comes to shove, it is a very convenient tool to get projects funded, so the practice continues.   At $300b, New York has the second highest state debt in the country (although, it has been on sound footing for several years.) 

It should be said that debt is not a bad thing for a state to have, especially when it is borrowing for infrastructure and public services that have long-term benefits. The problem is less the outright number or the state’s current ability to fund its debt service and more the ability to determine priorities. The assumption is that most voters won’t know enough or care enough about the state borrowing for a new bridge and might vote it down with enough protest.  This is unfortunately true in some cases. 

However, this is myopic.  The larger truth is that New York, like most states, gives money away for terrible projects all the time without facing voters’ wrath.  The city and state gave close to $500m to Yankee Stadium, without a “yes” from voters.  The Governor gave billions of dollars to upstate, without a “yes” from voters.  Just two weeks ago, it was announced that Aetna, the publicly traded insurance giant, will receive $34m in city/state money to move 250 jobs to Chelsea. Without having to justify expenses to voters, the state has wasted billions and will continue to. 

This all while expansion of public education, transportation, and pension funding all suffer.  It’s always the big-ticket items that get political pushback, but too many little things get through the cracks. This happens because the state thinks voters are ignorant and lazy when in reality they are ignored and misinformed.  Only by changing the way we control our taxes will that change.

There are a lot of other issues that could be addressed in a Convention and there are risks that silly ideas or even bad ones will get traction or distract the process.  These potential issues don’t outweigh the need to reboot the state of New York.  It is entirely healthy for citizens to revisit the organizing documents of its government. I hope that we do this fall. But it’s clear to me that without stronger federal action, cities and states can’t fend for themselves no matter how well run they are.

Cuomo In a Tantalizing Bind Over Housing

Working hard or hardly working, Andy? (ngn)

Working hard or hardly working, Andy? (ngn)

Tonight is the deadline for New York State’s elected officials to pass the next budget before the new fiscal year starts tomorrow. By all accounts it won’t happen. New York is not alone in struggling to pass a budget in the absence of clarity at the federal level.  President Trump has proposed severe cuts, which could imperil the $150b New York budget, making any proposals fraught with doubt.  But the president isn’t the only actor harming the process. Governor Cuomo has placed his ambitions and calculations ahead of the immediate needs of the state, particularly on housing.

I generally don’t care much for the horse race stuff about Governor Cuomo looking towards 2020 for a presidential run, but it is clearly a big part of his calculations right now. Unfortunately, this has a big immediate impact on affordable housing, so I’ll play along.  Though the presidential calendar has gotten shorter and shorter, it’s still too early for any candidate to be discussed seriously.  (For what it’s worth, I predict son following father and ultimately getting cold feet anyway.)

Before the governor can dream about 2020, he must get re-elected in 2018.  That’s likely, but not guaranteed.  That’s why this budget season is so crucial for him.  It will signal what kind of Democrat he will position himself as on the national level.  President Trump indirectly offers the Governor two radically opposed, equally fraught, options in my opinion.

Before I get to those two options, let’s remember a couple of important facts.  First, last year Governor Cuomo announced a huge five year $20b affordable housing plan that would build 100,000 units and outlined a longer-term plan for 20,000 supportive housing units.  Though light on details - it was through a Memorandum of Understanding (MOU) which isn’t handled like a normal budget allocation process and serves more as a wish list -  it was a major policy shift that scored political points from housing advocates across the state.

Second, Governor Cuomo also announced a (slightly) revamped plan called Affordable New York to replace the controversial 421a tax policy that expired last year when the governor blocked a compromised proposal over union wage labor.  The new plan would largely continue the existing framework of 421a, which would create dubiously affordable units at considerable cost to the city and state. Many advocates hate 421a, but developers love it.

In both cases, little has come to show for those initiatives. Of the initial $2b allotted in the 5-year plan, only $150m has been dispersed, while the rest remains frozen.  There is no deal yet on the new 421a/ANY plan either.

This lack of progress is because Governor Cuomo, relying on his love of MOUs, directly linked both proposals and one can’t happen without the other.  Because Democrats dominate the State Assembly and Republicans control the State Senate, the Governor seemingly made a political calculation that he could appease both chambers (or, more aptly their leadership) and deliver on his promises by using both proposals as balancing weights.  That has not panned out, despite the fact that both parties have agreed to allocate the frozen funding.

Governor Cuomo has had a history of making grand promises on affordable housing, attempting to deliver them through MOUs, and failing to do so. In addition to the current mess, has attempted to use settlement money from JP Morgan to combat homelessness to no avail, he has withheld funds for NYC over petty squabbling with Mayor de Blasio, and even his handling of the 421a expiration appeared to have been in bad faith.  It’s almost as if, even as a former HUD Secretary in the Clinton Administration, he isn’t that interested in housing policy.

Now we can return to the two democrats Governor Cuomo could portray himself as if he were serious about a 2020 run.  The first is the pragmatic power broker who gets things built while working with the other side.  This candidate is a more accurate representation of the Governor and could conceivably appeal to the donor class of the Democratic Party as well as moderate Republicans further alienated by the Trump Era. 

The second is the liberal firebrand championing infrastructure spending, gay marriage, and environmental protection that can rally the progressive wing of the Democratic Party without totally alienating centrists. Despite some notable achievements on some ‘liberal’ policies, this is not a natural position for the Governor to hold, even if that’s likely where the electorate will be.

This is why housing has proven to be such a challenge for Governor Cuomo to follow through on, despite his background in it. Right now, today, the issue is forcing him to pick one version of himself to commit to and it’s not clear which he should choose.

If he could deliver on affordable housing, it would further his narrative of being an effective progressive at the national level.  But to do this would alienate much of his bi-partisan bonhomie in the Senate and with wealthy developers whom he needs for his re-election in 2018.  Progressive affordable housing reform is deeply unpopular with these stakeholders and disappointing them poses an immense risk.

If he doesn’t deliver on affordable housing, it would leave him open to attacks from progressives at the state level. The need for affordable housing is so obvious and so urgent that failing to deliver on it could absolutely summon a credible challenger in a primary. This might not ultimately cost him the election in 2018, but it would solidify enough resistance that would damage his campaign and undermine his already flimsy progressive narrative on the national level.

Housing isn’t getting much of the focus in today’s last minute budget negotiations and there are certainly other issues holding up the process.  But that won’t let the Governor off the hook.  Housing looms over everything.

Though the state budget proposal does not spend much time addressing the potential cuts the state faces from the federal government, the Governor and elected officials from either party are rightfully concerned about them.  No one knows exactly how much of a gap this proposed budget will face if federal support dramatically changes over the next few years.

What is entirely left unsaid is that the state will be on the hook for the federal cuts expected to hit HUD and housing programs in general.  Given that NYCHA gets over 2/3 of its $3b budget from HUD, and HPD gets hundreds of millions, among other city-level programs, this leaves a potentially crippling whole that cities, even NYC, can’t possibly fill.  The fact that Governor Cuomo is dodging genuine leadership on housing even before these cuts should be alarming.  What happens if they do come? Will the Governor be there to help?

It’s possible that the budget will get worked out, housing funds will flow as promised, and these federal cuts won’t materialize.  Governor Cuomo could waltz along to re-election and to the national stage and New Yorkers would perhaps finally have some relief from the housing crisis.

But it is also possible that federal cuts will come, that their impact will effectively kill the current housing proposals, and potentially let the Governor off the hook for not delivering, while still appearing to champion affordable housing.  It would be deeply cynical to build a political strategy on this dire outcome, but politicians have done worse.

There are over 88,000 homeless in the New York State and nearly half of NYC renters are rent burdened.  The affordable housing crisis is too large to be viewed through a narrow political lens and it’s unacceptable that Governor Cuomo has chosen to do so.  Even without impending cuts from the federal level, the Governor has not delivered on his promises so far.  History will judge his next actions long after the voters in 2018 or 2020 get their say.

Why Mayors and Governors in New York Rarely Get Along and Why it's a Problem

Leave the bonds. Take the Cannoli. (north country public radio)

Leave the bonds. Take the Cannoli. (north country public radio)

Several news outlets in the city are reporting on the latest beef between Mayor de Blasio and Governor Cuomo and how it could harm upcoming housing projects in the city.  This particular beef is over federal tax-free bonds made available to states to encourage construction of affordable housing, but it represents just one rift of many between the two Democrats.  Troubling as this feud is for residents of NYC, it is part of an old, long-standing Great Game between the two most visible elected offices in the state and represents a much bigger problem with politics in New York.

First, the details of the bond feud matter a great deal in the ongoing affordability crisis in NYC. For decades, federal bonds (worth about $900m in 2014 and $700m in 2015) have been dolled out from New York State to New York City with little state interjection. These funds are tax-exempt on the federal, state, and city level which makes them attractive to developers and generally follows certain guidelines ensuring the creation of affordable housing units. The city has used these bonds in about 40% of recent affordable housing projects according to the NY Times article.

However, starting last year the state has begun to withhold money, which already delayed a city plan to develop 1,200 units. This trend has continued as state officials have been quietly informing city officials and developers over the last month that the city will no longer receive the same levels of money.  The funds that the city will get will now be micro-managed by the state through the Empire State Development Corporation and Public Authorities Control Board.  City officials and developers appear to be confused about why this change has occurred and are uncertain about how it will affect developments that have been approved or are close to construction. 

The Governor has downplayed the changes stating that they are intended to "supplement" rather than "supplant" the city's plan but so far has not made any of his own $20b housing plan's details public (he is expected to do so in April.) Given that Mayor de Blasio has made affordable housing a signature policy focus, these changes in funding options clearly put his housing plan at risk and the timing of the announcement has certainly raised eye-brows across the city and state.

The big question is if the money will still eventually be allotted to the same projects with the same goals that the Mayor has laid out.  If that is the end result, it will be hard not to view the move as a petty power grab by the Governor.  If, on the other hand, the Governor's housing plan is radically different than the Mayor's then it would be easier to claim that it represents a new policy focus, but could still have severe consequences for current projects. Either way, it is very public rebuff of the Mayor's agenda and throws many affordable housing projects up in the air.

Though some of the feud between the Mayor and the Governor might be chalked up to personality clashes or political differences, the reality is that this dynamic has been common in New York state politics for decades and speaks to a larger issue of political disfunction. The main culprits for this dynamic are New York State's unique history and geography.

New York State counties by geography and relative population size (maps4office)

New York State counties by geography and relative population size (maps4office)

The modern state border of New York evolved through a series of (still contested) treaties with the Iroquois Confederacy before and after The French and Indian War and the British after the Revolutionary War but also through equally contested agreements with Connecticut, Massachusetts, Pennsylvania and New Jersey. This has created a widely varied geographical entity with little practical cohesion.  In 1797, Albany was chosen as the permanent capital city because it was central enough for state legislators to travel to and it didn't overly bias the state's business towards the dominance of New York, which by 1835 became the largest city in the country. This tension defines the state to this day.

As a result of its geography, New York State is better viewed as two distinct sub-states which are referred to as "upstate" and "downstate".  The definitions are debated, but generally Upstate New York is considered everything north and east of Westchester County and made up of smaller cities and rural communities while downstate consists of the metropolitan region of New York including Westchester and Long Island.  Out of 19.7 million state residents, 63% live downstate with 40% living in NYC. 

Politically, upstate has generally been more conservative than the downstate metropolitan region but the population difference has made New York an uncontested blue state, voting Democratic in every presidential election since 1988.  However, at the state level, given the structure of the State Senate, Republicans have held power almost exclusively since WWII, balancing out the large population difference between upstate and downstate.

This creates a unique political dynamic that some have even argued should be formally separated. That's not going to happen, but it shows just how different the two sub-states are in reality.  It also explains the different constituencies that a mayor and governor have to play to.  Even though Governor Cuomo and Mayor de Blasio are both Democrats, and both broadly agree on many issues, they have to navigate vastly different political territory and interests. 

This is absolutely true of any governor/mayor relationship, but the size of New York City and its importance both nationally and internationally create different perceptions of the two offices. With the potential exception of Illinois/Chicago, no other state has a situation where the mayor of its major city is better known than its governor. That can create some bruised egos.

Further complicating the relationship is the fact that, though the mayor of New York City is generally higher profile, in reality the governor has significantly more power over the city.  Whether its tax policy, economic development funds, the MTA, the Port Authority, or housing laws the Governor controls much of New York City from Albany.  This creates a lot of tension between the offices, especially when they are held by the same party - whether it was Mayor Lindsay-Governor Rockefeller in the early 1970s, Mayor Koch-Governor (Mario) Cuomo in the 1980s, or Mayor Bloomberg-Governor Pataki in the 2000s.  If you're the mayor and the governor is the same party, you almost have to expect more opposition given the structure of power in Albany.

The upstate/downstate divide isn't just about political personalities clashing for headlines.  It has a major impact on policy decisions because it warps voter representation and turnout.

I've already mentioned how the population tilt makes it a safe blue state nationally for Democrats while the balance of power in the State Senate has been dominated by Republicans since WWII because of redistricting.  This balance is a false and dangerous one perpetuated by both parties.  Senate districts have overrepresented upstate while Assembly districts have overrepresented downstate making sure the status quo remains intact. This has resulted in stunning corruption across the state and has frozen the political discourse.

Senate Districts (latfor)

Senate Districts (latfor)

It has also caused historically low turnout.  In Governor Cuomo's re-election in 2014 (33%) and Mayor de Blasio's election in 2013 (28%) the state and city experienced their lowest turnout on record. Some of the low turnout in those elections can be explained by the lack of a real contest.  For Mayor de Blasio, winning the primary assured a sweeping victory in the general election. Governor Cuomo had a closer race, but was excepted to sail to victory and did.  

A more troubling explanation could be voter disillusionment.  It's not hard to become cynical when Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver (two of the "Big 3" in state politics for a long time) were both found guilty of corruption while scores of other state officials have also been charged and convicted.  Voters don't have much faith in state politics and have turned away in New York State and beyond, which is surely fine with varied interests that benefit from the status quo. When voters aren't paying attention, a lot of deals can be made that they wouldn't like regardless of their political persuasion. 

It is natural and even healthy for tension to exist among elected officials.  Though much of the mayor-governor clashes in New York have been ego driven, some are based on policy and vision, which is how any healthy democracy should operate. The fact that the current dynamic between the Mayor and the Governor potentially distracts the media and voters from the larger issues of fair representation, transparency, and accountability at the state level is dangerous, however.  We can already see how the feud impacts affordable housing policy.  

 The ongoing calls to reform Albany must be repeated by the media to reach voters currently sitting out the process.  Only when more voters reenter the political discussion will we see the types of ethics reforms and policy changes that the state, whether up or down, needs.