Cuomo delivers 10th State of the State Address
Meanwhile, the state is facing a $6B budget deficit
Gov. Andrew Cuomo’s agenda for the upcoming legislative session includes lifting some licensing restrictions for real estate brokers and renewing the push to legalize marijuana in the state.
Cuomo laid out his agenda in his 10th State of the State address Wednesday and his administration’s 300-plus-page State of the State Book. He also acknowledged that his administration faces a $6 billion budget deficit this year, which he largely blamed on rising Medicaid costs.
“The local governments still administer the program, even though they no longer share the costs, and we have seen dramatically higher cost increases recently. Why? You can’t separate administration from accountability,” he said. “It’s too easy to write a check when you can’t sign it.”
The governor pegged New York City’s share of these costs at $2 billion, and indicated that individual counties could be forced to foot more of the bill — potentially setting the stage for contentious budget negotiations.
During the speech, Cuomo mentioned a few issues related to the real estate industry, including the state’s affordable housing program and potential small-business tax cuts. These and other proposals are spelled out in the State of the State Book.
Here are some of the proposals that could affect the industry:
1. “Historic” homeless funding
In his speech, the governor said there are two key factors in solving homelessness: “commitment of resources” and the “competence of administrations.” He indicated that his administration would dedicate a historic amount of funding to homelessness, though he didn’t provide a figure. The State of the State Book says the governor will invest
$5 million to expand permanent supportive housing for homeless veterans through the state’s Homeless Housing and Assistance Program. In May 2017 the governor launched a $20 billion program aimed at creating more than 100,000 affordable housing units and ending homelessness.
2. Small business tax cuts
Cuomo proposed decreasing the tax rate for businesses with fewer than 100 employees and less than $390,000 in income to 4 percent from 6.5 percent. The governor didn’t mention the possibility of enacting a pied-à-terre tax, which was seriously considered in last year’s budget negotiations. Manhattan State Sen. Brad Hoylman has indicated that he will again push for the measure this legislative session.
3. Legalized marijuana
Though efforts to legalize the drug failed last year, the governor vowed to make it happen this time. As campaigns to legalize marijuana have gained momentum across the country, property investors have increasingly looked for ways to capitalize on the need for cannabis-friendly commercial space.
4. Benefits for independent contractors
In the State of the State Book, the governor pledged to introduce legislation to help people in the gig economy. The measure would ensure that “all of New York’s workers have necessary benefits and protections,” such as paid family leave. Late last year, a group of labor advocates formed to push for a change to the state’s definition of “independent contractor,” Politico reported at the time. It’s not clear if the governor’s measure would apply to real estate brokers, who are considered independent contractors. (Previous efforts have largely focused on Uber and Lyft drivers.)
5. New broker license requirements
The governor, according to the State of the State Book, will also push for legislation to remove a few barriers to those seeking occupational licenses, including real estate brokerage licenses. Under the current law, prospective licensees must be U.S. citizens or have a green card. Cuomo proposes to eliminate that requirement.
6. $3 billion ‘Restore Mother Nature’ Bond Act
This funding would be dedicated to habitat restoration and flood reduction. By 2030, according to the governor, “every corner of the state will see measurable improvements as a result of resiliency investment and increased or new recreational opportunities.” This includes investing in flood-resilient infrastructure and installing nearly 200 million shellfish on Long Island to make up for diminished oyster and clam populations.
7. Continued fight to repeal SALT
Cuomo called on the federal government to repeal the $10,000 cap on state and local tax deductions, or SALT. In December, the U.S. House passed the “Restoring Tax Fairness for States and Localities Act,” which would lift the cap. The measure isn’t expected to pass the Republican-controlled Senate.
8. Penn Station expansion
Earlier this week, the governor announced plans to build a new terminal to the south of Penn Station. The project would require the state to buy up several private properties. It’s unclear how the state will go about this.