A perfect budget storm
With help from Amira McKee
Wall Street could be the state budget's savior next year — or a major headache.
Gov. Kathy Hochul and the Democratic-led state Legislature are already contending with a $3 billion hit to the Essential Plan taking effect next fiscal year, which provides health coverage to about 1.6 million low-income New Yorkers.
The cut is being heaped on top of a pre-existing $7.5 billion budget gap.
And if the financial industry — the engine that fuels New York's economy and tax revenue — goes south, the consequences for Albany could be massive.
'If we get hit not just with the federal restructuring, but with an economy that starts to slow down or tank — that's where we could get that perfect storm,' Comptroller Tom DiNapoli told Playbook in an interview on Monday.
That kind of financial turbulence would come at a bad time for the governor, who's running for a second full term next year.
She stands to be hit with political crosscurrents from lefty Democrats who'll push for tax hikes and from wealthy New Yorkers who contribute an outsize share of taxes to the state's coffers.
State officials are still assessing the fallout from President Donald Trump's megabill, a sweeping federal tax-and-spend package that includes significant cuts to Medicaid and food stamps.
Hochul told reporters Monday she plans to roll out a 'swat team' to find ways of saving money as the state also works to address the $750 million being slashed from the Essential Plan — cuts which will take effect Jan. 1.
She also defended her $2 billion rebate program, which was approved in the May state budget and will send New Yorkers cash this fall. Hochul insisted the money, which was pared down from the original $3 billion proposal, will help people make ends meet.
'Now more than ever families across New York will appreciate what I did for them and putting money back in their pockets,' the governor said.
DiNapoli, a Hochul ally, was not as enthusiastic about the check plan, which Hochul has framed as a way to bust inflation.
'I wouldn't say it was a mistake, but that creates spending that has to be balanced against these other cuts,' he said. 'Rebates are going to happen, hopefully that will help people.'
DiNapoli expects finding ways to offset the loss of $750 million in the current fiscal year will be relatively easy. The harder part comes next year when lawmakers and Hochul negotiate the state budget.
'My guess is everything will have to be on the table — cuts, tax increases,' DiNapoli said. New York Democrats have already trained their ire on Republicans over the federal cuts, pre-emptively blaming them even before the mega-bill became a mega-law.
There are limits, though, to the blame game. Hochul will still need to get a balanced budget on the books months before voters render their verdict on her tenure.
'It could be a tough budget,' DiNapoli said. 'It's an election year and there are more pressures in an election year.' — Nick Reisman
IT'S TUESDAY: Got news? Send it our way: Jeff Coltin, Emily Ngo and Nick Reisman.
WHERE'S KATHY? In New York City with no public schedule.
WHERE'S ERIC? No public schedule available as of 10 p.m. Monday.
QUOTE OF THE DAY: 'You know, the Dos Equis commercials, the most interesting man in the world? That is him. This guy is having this moment, and he's capitalizing on it.' — Trump adviser Alex Bruesewitz on FIFA President Gianni Infantino, in POLITICO's look at how the sports executive learned to navigate American politics ahead of next year's World Cup.
BONUS QUOTE OF THE DAY: 'Columbus is worse than pineapple on pizza.' — One of the signs at the Italian-Americans for Zohran Mamdani counter protest Monday, opposite a rally organized by The Italian-American Civil Rights League after discovering Mamdani had posted a photo flipping off a statue of Christopher Columbus.
ABOVE THE FOLD
WHAT HAPPENS IN VEGAS: A member of New York City Mayor Eric Adams' campaign team attended the same Las Vegas Bitcoin conference where the mayor spoke on the taxpayer's dime — the latest twist in a trip that has alarmed ethics experts several times over.
In May, Adams traveled to Sin City to deliver two speeches at the crypto gathering in his official capacity as mayor. During an on-camera interview Adams gave at the summit, his campaign spokesperson, Todd Shapiro, briefly pops into the frame just feet away.
Adams has already taken heat for hosting a fundraiser during his Las Vegas trip, as the Daily News and New York Post have reported. Government reform groups were also concerned about a POLITICO report that found a pro-Adams super PAC executive attended the event and discussed soliciting cash from the crypto community.
City statutes prevent the mayor from using official resources for campaigns, and election laws prohibit coordination between super PACs and candidates.
Shapiro said he was briefly at the Las Vegas confab at the behest of billionaire crypto investor Brock Pierce and that he did not perform any campaign-related activities — not even coordinating fundraising — while in town.
'I want to clarify that I was not attending any Bitcoin conference on behalf of the campaign, nor was I aware of any formal event taking place,' Shapiro said. 'I was simply a guest of my former client, Brock Pierce, and have a personal interest in blockchain technology.'
Pierce sung the praises of Adams while at the conference.
'He's not about to be the crypto-mayor. He is the crypto mayor of the United States of America,' he said in an on-camera interview at the event. 'And it is mission critical to me — I believe New York City, the state and the nation, and therefore the world — that it stays that way and he stays the mayor of New York City.'
City Hall referred POLITICO to its statements from last week noting that the fundraiser was a small portion of the trip.
'The overwhelming majority of the trip was dedicated to discussing crypto policy for the city,' spokesperson Kayla Mamelak Altus said at the time. — Joe Anuta
CITY HALL: THE LATEST
MEMBER DEFERENCE IN DANGER: A majority of City Council members — from socialists to Republicans — oppose the Charter Revision Commission's approved ballot measures, saying they'll reduce elected officials' and organized labor's input on building housing.
'Mayor Adams' Charter Revision Commission is giving away the store to luxury housing developers while cutting our communities out of the process,' reads a statement organized by City Council Member Sandy Nurse and signed by 31 of her colleagues.
The commission voted Monday to place four questions on the November ballot that are meant to make it easier for the city to build apartments. A fifth question would start the process of holding city elections in the same years as presidential races.
Council Speaker Adrienne Adams and her leadership team blasted the 'misguided proposals' in a separate statement, saying they'd 'undermine the ability to deliver more affordable housing, homeownership opportunities, good-paying union jobs, and neighborhood investments.'
The council has a tense relationship with the mayor. The speaker and other members staunchly opposed ballot proposals from Eric Adams' charter revision commission last year too, but voters approved four out of the five. — Jeff Coltin
SCHOOL BUS WOES: Two prominent citywide Democratic electeds are demanding short-term extensions on school bus contracts and are pointing to persistent, adverse impacts on the 145,000 students who depend on taking buses.
The Panel for Educational Policy, the Department of Education's governing body, is expected to vote Wednesday to approve a 30-day emergency extension of the contracts.
In a Monday letter to Adams, Comptroller Brad Lander and Public Advocate Jumaane Williams urged him to limit any contract extensions to between one and three years after learning the administration is exploring a five-year timeframe.
Shorter term extensions would give state lawmakers in Albany time to enact legislation ensuring bus driver protections are included in new contracts, the pair said. The DOE could then rebid the contracts with improvements.
'The bus companies may be content collecting taxpayer dollars while delivering unacceptable service, but our students and families deserve far better — and they should not have to wait until 2030 for relief from a system that's failing them now,' Lander and Williams wrote.
State lawmakers didn't pass legislation this year that would protect bus drivers' wages and benefits. The contracts expired at the end of June.
Jenna Lyle, a DOE spokesperson, only said longer extensions are under negotiation when asked to confirm whether the city is eyeing a five-year extension.
'New York City Public Schools has been clear: our outdated busing contracts must be rebid to allow for flexibility and accountability and to ensure the best possible transportation system is available to our students,' Lyle said in a statement. — Madina Touré
THE DISTASTE IS MUTUAL: Israeli Prime Minister Benjamin Netanyahu dismissed some of Mamdani's campaign proposals as 'nonsense' and suggested he'd lose reelection if he wins. (CNN)
More from the city:
— The New York Young Republican Club argues Mamdani should be disqualified from the election for providing 'aid and comfort' to enemies of the US. (New York Post)
— Former Trump adviser Jason Meister formed an anti-Mamdani super PAC called Defend NYC. (City & State)
— A brand new $241 million jail unit in Bellevue Hospital is empty due to staffing issues. (THE CITY)
NEW FROM PLANET ALBANY
PLAY ON: A key legislative Democrat is pushing back against Trump's reported plan to limit college athletes' compensation.
Trump's plan, tentatively called 'Saving College Sports,' would set rules for how athletes can be paid for their name, image and likeness. The draft reportedly would classify college athletes as students and not employees — potentially limiting how much they could receive in promotional compensation.
Assemblymember Michaelle Solages, the chair of the Black, Puerto Rican, Hispanic and Asian Legislative Caucus, blasted the idea.
'This only further limits the legal rights of these young individuals by making them more vulnerable in these workplaces,' Solages said. 'This order has been delivered to the American people under the guise of protecting our young and vulnerable population, but will certainly prove detrimental to the future of the athletes that these sport institutions depend on.'
There have been efforts at the state level in recent years to set regulations for college athletes and their compensation. Hochul in 2022 signed into law a measure that bolstered compensation rules in college sports and allows athletes to retain representation to help negotiate deals. — Nick Reisman
More from Albany:
— Assemblymember Sarahana Shrestha wants to build a progressive movement in the Hudson Valley. (City & State)
— Like her predecessors, Hochul wishes she had more control over the State Education Department. (Capitol Confidential)
— The state pension fund is bulking up its private equity investments. (Chief Investment Officer)
KEEPING UP WITH THE DELEGATION
'GOOGLE IS FREE': Rep. Alexandria Ocasio-Cortez defended her pro-Palestinian record after her Bronx campaign office was vandalized with red paint accusing her of funding genocide in Gaza.
'Google is free. If you're saying I voted for military funding, you are lying. Receipts attached,' AOC posted on X Monday afternoon.
'My record on Palestine speaks for itself. I'm proud of it. One of the strongest in Congress. I throw down for pro-Palestine candidates. Largely unrecognized work. That's fine,' she said in another post on Bluesky.
Ocasio-Cortez voted against far right Republican Marjorie Taylor Greene's amendment to cut defense aid to Israel, a vote that failed 422-6.
The amendment 'does nothing to cut off offensive aid to Israel nor end the flow of US munitions being used in Gaza. Of course I voted against it,' Ocasio-Cortez posted on X about the Friday night vote. 'What it does do is cut off defensive Iron Dome capacities while allowing the actual bombs killing Palestinians to continue.' — Jeff Coltin
More from Congress:
— Trump's megabill would increase the federal deficit by $3.4 trillion and cause 10 million people to lose health insurance over the next decade, per a Congressional Budget Office forecast. (POLITICO)
— Rep. Elise Stefanik's ethics complaint against a D.C. judge was tossed by an appeals court. (Bloomberg)
— Jeffries reiterated he hadn't endorsed Mamdani for mayor and said they'd meet again when he gets back from Uganda (Fox News)
NEW YORK STATE OF MIND
— Buffalo community groups want New York to strike a better deal with Tesla. (Buffalo News)
— New York is among the states suing the Trump administration over barring undocumented immigrants from accessing federally funded services. (Gothamist)
— A job ad for a Nassau County district attorney candidate encourages people with criminal records to apply. (New York Post)
SOCIAL DATA
MAKING MOVES: Brendan Griffith was elected president of the New York City Central Labor Council, AFL‑CIO on Thursday. He was previously chief of staff, and was serving as interim president after Vincent Alvarez stepped down.
HAPPY BIRTHDAY: Former Rep. George Santos (R-N.Y.) … state Sen. Dean Murray … Patrick Jenkins … Red Horse's Doug Forand … Ariana Collado of the Bronx Dems … BerlinRosen's Louis Gonzales … Michael Jon Fieni of the Brooklyn Public Library … Annie Lowrey … CNN's Terence Burlij … Sam Brodey … Warren Bass … Peter Prengaman … Natacha Hildebrand … Maor Cohen … Don Van Natta Jr. … (WAS MONDAY): Shonni Silverberg ... Jane Ginsburg ... Jon Lovitz ... Eric Simonoff
Missed Monday's New York Playbook PM? We forgive you. Read it here.
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