I have never closely followed New York State’s budgeting process before because I never felt connected to Albany politics, and it seemed so complicated. My obsession with the unfolding disaster of the Climate Leadership and Community Protection Act (Climate Act) net-zero transition has prompted me to take an interest in the process. The latest New York Focus Newsletter describes budget articles that include an overview of the process and discussion of funding proposals with one article focused on funding for the ambitious climate goals. I recommend all the stories to New York readers.
I am convinced that implementation of the New York Climate Act net-zero mandates will do more harm than good if the future electric system relies only on wind, solar, and energy storage because of reliability and affordability risks. I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 500 articles about New York’s net-zero transition. The opinions expressed in this article do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone.
Budget Overview
Sam Mellins answers questions about the state’s notoriously opaque budget process. His article addresses the following questions:
- What is the state budget? It is likely to allocate over $250 billion with “biggest shares going to healthcare and education. He makes the critical point that the budgeting legislation is also used to “enact laws that don’t involve spending money.” Guess how the Climate Act was passed.
- Where does the money come from? Most of the money allocated in the budget comes from the taxes that New Yorkers pay to the state government. But a sizable portion is cash that the federal government gives New York to provide services “ranging from highways and transit to health insurance for low-income residents.”
- What are the major steps in the budget process? This description summarizes the process that is used to pass the budget.
- Who are the key players? I was aware that the budget negotiations boiled down to a few individuals. Mellins explains that “Three key parties dominate the process: the governor, the Senate majority leader, and the Assembly speaker.”
- How does our process compare to other states? This is a must-read section: “In a 2015 analysis by the Center for Public Integrity, New York ranked dead last among all states for accountability and transparency in its budget process.” Not surprisingly the politicians ignore State Constitution requirements and push things through at the last minute.
- Is the entire budget up for negotiation? Mellins explains that most of the budget is more or less on autopilot so only “optional” items cause debate.
- How does the public get involved? Mellins notes that the budget process is always accompanied by a flurry of lobbying, activism, and advocacy and that “Any New Yorker can submit written testimony during budget hearings.”
Funding the Green Transition
Colin Kinniburgh describes how the Senate, Assembly and Governor stand on funding Climate Act implementation. As this is my primary focus, I will quote his article in its entirety with my annotated comments. He introduces the article with this: ” If Albany is planning to rally against the Trump administration’s attack on its climate plans, it’s not showing in the budget.”
The New York Cap and Invest program is of special interest to me. Establishing any cost on carbon like this program is no more than a hidden and regressive tax. The slow pace of implementation may be the result of dawning realization that the costs involved may be politically inimical to its political supporters. Kinniburgh describes the status:
In New York, the governor sets the budget agenda. That’s particularly clear on climate this year. Breaking two years of promises, Governor Kathy Hochul in January dropped the climate funding program known as “cap and invest” from her 2025 agenda. Her agencies have been writing the rules to structure the carbon pricing program, but the legislature would likely have needed to approve spending the resulting revenue — about $3 billion a year and growing — setting up what could have been a major budget fight.
Hochul effectively brushed that plan off the table, and the legislature isn’t making any big moves to bring it back.
The reality is that this is a major undertaking but despite the challenge the Department of Environmental Conservation managed to get draft rules put together. The reason that they have not been released is solely due to politics and the inevitable need to show the costs. No amount of gilding the pig with slogans will be able to hide the costs. But funds are still needed if the Climate Act transition is to proceed.
In the place of the permanent program, Hochul offered a one-time, $1 billion budget line to fund a variety of climate initiatives over the next five years. The Senate and Assembly have both accepted that amount, though they want more guardrails on how it’s spent. Hochul’s proposal lists a few broad areas she wants to fund, like renewables and building retrofits, but gives little further detail.
The Senate wants to give legislative leaders a chance to review the governor’s spending plan. The Assembly has gone further, divvying the $1 billion between seven programs advancing building decarbonization and electric vehicles, particularly school buses and charging infrastructure.
“The governor and Senate have a slush fund, the Assembly makes clear allocations,” said Liz Moran, Northeast policy advocate at Earthjustice, in a text message.
In this political process the missing piece by the Governor and the legislators is the reality that they don’t have the expertise to set energy policy funding priorities. Selective listening to supposed authoritative sources all the while ignoring the experts who have the responsibility to keep the lights on, choosing winners and losers based on lobbyist effectiveness, and setting priorities based on the whims of favored constituencies is sure to result in poor policy.
The Senate also includes a nod to cap and invest in its budget resolution, urging the governor to “immediately issue all draft regulations necessary” to implement the program. (Hochul has said her agencies need more time to complete the rules, but internal emails reported by Politico show that they were ready to go before she abruptly hit the brakes in January.) There’s little chance that the message will revive cap and invest in this year’s budget, but it adds to a growing chorus. (Green groups’ call to release the regulations may soon be backed up by a lawsuit, according to Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia University.)
This paragraph scares me. The only thing that could foul up the proposed cap-and-invest program more than the provisions inserted in the draft regulations to comport with the Climate Act would be for politicians to get involved with implementation details. Well maybe it would be worse if some judge decides how to do the implementation. Kinniburgh goes on to describe other “big-ticket climate items.”
The NY HEAT Act, a top priority for green groups, once again faces an uphill battle. For the third year running, the Senate has included the bill — which would allow the state to gradually transition homes off fossil fuels — in its budget proposal. But the chamber is alone in doing so. Last year, Hochul included a version of the bill in her budget, but the Assembly blocked it in final negotiations.
There’s no sign in its budget proposal that the Assembly is warming to the HEAT Act this year. Two assembly members told New York Focus that its omission reflected the chamber’s longstanding — and inconsistently held — position that policy does not belong in the budget, but they expected it to be on the table in final talks.
I could not agree more with the admonition that policy does not belong in the budget. What is absolutely necessary for the climate budgeting strategy is a clear, transparent, and well documented description of the costs, emission reductions, realistic implementation schedules, and expected revenue streams for the strategies proposed to meet the Climate Act mandates. The time for only providing the slogan that the cost of inaction is more than the cost of action has long since passed. New Yorkers deserve the details. The total costs to implement the NY Heat Act is a prime example of this need.
There is one new climate item that the legislature has aligned on: solar tax credits. The current $5,000 credit for homeowners who install solar power took effect in 2006 and has not been updated since. The Assembly and Senate want to increase the maximum credit to $10,000 and make it easier for co-op and low-income residents to receive it.
The tweak would give a further boost to small-scale solar, the only area where New York has outpaced its climate targets. The state closed out last year with 6.6 gigawatts of rooftop and community solar, beating its 2025 goal. But research has found that the subsidies fueling that growth go disproportionately to high-income homeowners. This year’s budget legislation, with newfound support from the Assembly, aims to shift the balance.
This is a perfect example of political ambition outrunning reality. It is accepted by all credible sources that to support a reliable New York State electric grid that depends primarily upon wind, solar, and short-term storage resources that a new dispatchable and emissions-free resource (DEFR) must be deployed. In my opinion, the most promising DEFR technology is nuclear generation because it is the only candidate resource that is technologically ready, can be expanded as needed, and does not suffer from limitations of the Second Law of Thermodynamics. If the only viable DEFR solution is nuclear, then renewables cannot be implemented without it. But nuclear power runs best as baseload generation so it can replace renewables, eliminating the need for a massive DEFR backup resource. Therefore, it would be prudent to pause all actions that encourage further renewable development until DEFR feasibility is proven because nuclear generation may be the only viable path to zero emissions.
Kinniburgh concludes:
Solar boost aside, the Senate and Assembly’s proposals leave climate issues largely where Hochul did: in the margins of budget talks. Almost six years after New York passed a climate law promising to shift its economy away from fossil fuels, the state has committed no consistent funding to do so, and it looks like this year’s budget will not change that.
I would only add that six years after the law passed the Hochul Administration has still not opened the books on the expected costs. In these budget debates those costs are absolutely necessary.
Other Articles
The newsletter included links to other articles about the budget. There is one about budget showdown hot topics including millionaire tax hikes and inflation rebate checks. Another article dives into the proposal for a “middle-class” tax cut. The legislature has proposed more money for child care than proposed by the Governor. Another item raised by the legislature are changes to the school funding formula. The legislature has proposed a boost to nonprofits and safety net programs serving New York’s neediest. After the recent prison strikes actions on prisons and public safety policies will be debated.
Conclusion
As a New Yorker I am not sure what is the biggest embarrassment. Is it a plan to completely transform the economy to eliminate fossil fuels without doing a feasibility analysis before implementing it? Or is it the annual budget process back-room shenanigans described in these New York Focus articles. The only thing I am sure of is that the impacts of both are not in the best interests of New York.
Pragmatic Environmentalist of New York 