2017 Legislative Session Begins
New Assembly Members Sworn in to Office in Albany Ceremony
This afternoon we began the process of formally opening our 2017 Legislative Session in Albany. New Assembly Members were given the oath of office and we were addressed by Speaker Heastie. He opened the 240th Legislative Session by welcoming new members including Inez Dickens (who replaced Keith Wright) to Albany. He discussed the important work we will do this year including fighting to improve education and housing while working to preserve improvements to health care, and also thanking us for again electing him to serve as our leader.
Other business of the house was undertaken to prepare for the busy six months ahead before the Session concludes in late June.
Assemblyman Farrell welcomes Inez Dickens, a former City Council member, to the Assembly in Albany. She was elected to replace Keith Wright, who had left office.
A New Idea for a New Year: Free College Tuition Suggested
During a speech in Queens this week, the Governor announced that he intends to pass legislation creating a new program that will grant New York State college students free tuition to State colleges. This program will apply to students if their family's household income is less than $125,000 per year. Details of the plan are forthcoming. It is an intriguing idea, and my staff and I are looking forward to reviewing the details as they are made available to us.
Affordable Housing Remains a Top State Priority
As has been discussed in previous reports, a top priority for the 2017 Legislative Session will be granting final Legislative approval to a program that began last year and is intended to invest $2 billion in State funds in a new program to preserve and create affordable housing. Our Members and staff are in the process of reviewing details of this important plan. While that important work is ongoing, I am happy to provide good news in regard to a related affordable housing program.
Last year, along with colleagues including former Housing Committee Chair Keith Wright, I worked to get funding into the budget that will support a Greater Harlem Housing Development Corporation project. My colleagues and I were approached by leadership of this local not-for-profit, who asked for our support in funding renovation of existing apartments here in Northern Manhattan. In total, nine buildings containing 117 apartments will be improved.
This number may seem small compared to other affordable-housing programs that are now underway or under consideration, but it is my firm belief that this project will not seem like small potatoes to the hundreds of hardworking New Yorkers including dozens of families who will live in these apartments after renovations are complete. It was a pleasure to join my colleagues in supporting this project, and I look forward to further serving our community's need for housing.
NY State Minimum Wage Rises for 2017
As you may have heard, the minimum wage received by about 750,000 workers in New York State rose as 2016 gave way to 2017 because of a law we passed in Albany. As of January 1, the legal minimum wage in New York City is now $11 per hour, and this is set to rise by $2 each year until the wage reaches $15 per hour in 2018.
There is an exception for small businesses that legally allow raises to be granted at a slower pace in order to avoid harming these businesses, and the wage will rise at a slower pace upstate where the cost of living is lower.
Still, a higher minimum wage will provide real help to hardworking New Yorkers, especially those who are struggling to support their loved ones while only earning minimum wage. I often remarked during our debate in Albany on whether to raise the wage that though opponents of higher wages like to claim that better pay harms workers, history has shown that this is not true.
As a colleague pointed out, we are not harming the businesses that serve our communities. We are giving them new customers.
Herman "Denny" Farrell, Jr.
Assembly Returns to Albany, Preparing for 2017 Session
I would like to wish a happy and healthy holiday season to you and yours. During the week of December 5 to 7, the Assembly returned to Albany for a retreat during which we welcomed new members of our Majority Conference and conducted other housekeeping business.
During these working days we also re-nominated Assembly Member Carl E. Heastie as our Speaker, who will be formally reelected as the leader of our Conference on January 4, 2017. I delivered a midyear report on the budget for State Fiscal Year 2016-2017, details of which follow, and members discussed plans for the upcoming Session.
There have also been discussions of raising pay for the incoming class of State legislators, but the legality of doing so as we had planned to do through an independent committee is in question because the period of time that committee was given by law has come and gone. We may come back in to session before the end of the year to resolve this and other questions, as well as other priorities recently identified by Governor Cuomo
Forecast: Economic Recovery Slow but Steady
My Ways and Means Committee staff and I prepared a midyear report on the national and State economies, which I delivered to members during out December retreat. The national economy is on track to achieve modest but steady growth of two percent in 2017 and 2018. Growth in 2017 and 2018 is expected due to projections of increased consumer spending, modestly higher business investment and greater foreign demand for US-made goods.
Economy Weakened by Low Level of Business Investment
Business investment is the foundation of long-term productivity and economic growth. While business investment has declined in 2016 compared to other years, which is in part because of the strong dollar and low energy prices, we expect business investment to increase and lead to stronger economic growth in 2017 and beyond.
Unemployment Down, but Labor Participation at Historic Low
While unemployment is lower than its' peak during the Great Recession and is near the steady long-term unemployment rate, labor force participation continues to be at an all-time low. This implies that a lower number of able-bodied and willing adults are entering the labor market and seeking jobs, which could present a challenge as we move forward.
Economists See Possible Wall Street Bubble
The strength of the stock market is also a cause for concern, because economists are becoming concerned that Wall Street is in a bubble that is in danger of bursting, which could have a strongly negative effect on New York State's finances, as I shall explain shortly. Following poor performance in early 2016, Wall Street has come roaring back and continues to set new record highs. While this is good in the short term, market conditions remain highly unpredictable and developing clear and correct forecasts that will affect State revenues will be difficult.
State Unemployment Rate Falls to Five Percent
Like the national labor market, State unemployment rates have dropped to about five percent from their Great Recession highs of 10 percent. This recovery, however, has been uneven across the State. Unemployment in New York City remains high, though more jobs have been created here, which reflects our City's strength as a financial and tourism center.
Recovery Creating Mostly Service Jobs
The types of jobs which have been created by the economic recovery also affect our overall economy. Manufacturing jobs continue to decline while service jobs, which include hospitality, health care and teaching, have increased. This is important because many of these service jobs are lower-paid than highly-skilled manufacturing jobs, which affects State revenues.
Wall Street Still A Key Part of State Economy and Tax Base
Finance and insurance industry earnings account for a full 18 percent of all wages paid in New York State. Government, professional services such as law and accounting, and health care make up a combined 36 percent of all wages. Therefore, 54 percent of all wages paid in New York come from just four fields. This shows how important Wall Street wages are to our economy.
Further, a key component of Wall Street wages are bonuses paid to employees, which tend to change a great deal year to year as they generally reflect the overall profits of these companies. While my staff and I expect bonuses to grow in the future, we will continue to watch closely.
Tax Receipts Fall Below Projections
Tax receipts continue to fall below the projections we made before passing this budget for State Fiscal Year 2016-2017 this past spring. Estimated payments from small businesses and the self-employed are down $965 million, corporate tax receipts are down $229 million, estate tax receipts are down $425 million, and other forms of revenue are $1.5 billion less than what we forecast. While some of these declines were a matter of State policy through tax cuts and other programs, other factors like the decline in estimated tax payments were not foreseen.
Ways and Means Staff Forecasts Stronger Economic Recovery
Overall, my staff and I currently expect the economy to continue to grow and are forecasting that during State Fiscal Year 2017-2018 tax revenue will grow by 3.8 percent. This figure is about $2 billion less than the Executive Branch forecast, as we do not believe wages and the overall economy to grow as sharply as do the Governor's economic analysts.
Farrell Staff Honored
To close on a more festive note, a holiday party was held by the Tioga Carver Club on Sunday, December 4. My staff member Earnestine Bell-Temple was presented with an award for her years of hard work in the community by your Chair, Brian A. Benjamin, which was a wonderful thing to see.
Community Board 10 Honors Community Leader
During the affair, a toy drive was also held during this event to benefit the children of our communities. I wish them, and you, a happy and healthy holiday season.
Herman "Denny" Farrell, Jr.
Ways and Means Committee Chairman Farrell addresses questions relating to changes in the Gap Elimination in the Assembly Budget Proposal. E.203