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Albany passes final budget Saturday that includes mayoral control, housing deal

New York City’s mayor will stay in charge of the city’s public schools for the next two years as part of the New York state budget, which lawmakers in Albany passed on Saturday afternoon, nearly three weeks after it was due.

The state Legislature spent much of the week voting on the $237 billion spending plan it negotiated with Gov. Kathy Hochul, which includes a long-sought-after housing package and measures meant to crack down on retail theft and unlicensed marijuana shops.

But the governor, legislative leaders and their staff haggled over the details of the final major budget legislation well into Friday night, before formally introducing it on Saturday morning.

That bill — known in Albany parlance as the “Big Ugly” since it’s crammed full of the budget’s most-debated issues — includes the short-term extension of mayoral control of the New York City school system, which has been in place since Michael Bloomberg was mayor in 2002.

But it comes with significant strings attached, including measures meant to ensure Mayor Eric Adams’ administration spends billions of dollars to meet looming class-size limits, due to begin taking effect next year.

“We listened to many stakeholders, certainly conversations with the union leaders and others, to talk about what is necessary to make sure that this is the best school system that our children could ever expect,” Hochul said Friday, shortly before the deal was finalized.

The state budget was due before the start of New York’s fiscal year on April 1.

Since then, Hochul and the Legislature have passed a series of short-term budget extenders to ensure the state pays its bills and gets its payroll out on time.

Hochul declared Monday that she and legislative leaders had reached “the parameters of a conceptual agreement” on a budget that would include a broad housing deal.

The “Big Ugly,” now sheds light on the details of that agreement, which tenant advocates and landlord organizations have ripped as insufficient.

It includes a renewed tax break for New York City housing developers who commit to reserving a percentage of their units — generally 25% — for lower income renters at below-market rates. It also lifts a longstanding cap on density in city residential buildings based on the size of a given lot.

New York City will also get a new pilot program to legalize basement apartments and bring them up to code, but — after extensive back-and-forth with lawmakers — it will be restricted only to targeted areas of the Bronx, Manhattan and Brooklyn. That does not include East New York, the Brooklyn neighborhood that was the site of a previous, ill-fated pilot program.

“Some neighborhoods really want this,” Hochul told Lehrer. “Some do not. And so we don’t want Albany to always be dictating exactly what’s going to happen at the street level.”

The deal also includes new “Good Cause” eviction protections for existing New York City renters, which will prohibit landlords from evicting tenants without a bona fide reason, such as nonpayment of rent or violating a “substantial obligation” of their lease.

The eviction protections will also allow renters to challenge a rent increase beyond 10% or 5% plus the rate of inflation, whatever is lower.

But the Good Cause measures won’t protect renters in a number of different situations, including if their rent is already beyond 245% of the fair market rent standard, or if their landlord owns 10 or fewer units. It also includes a 30-year exemption for newer buildings that got their certificate of occupancy since the start of 2009.

Tenant advocates, like Cea Weaver of Housing Justice for All, say those carveouts will make enforcement difficult, if not impossible, since many buildings are owned by faceless, untraceable limited liability companies.

“Gov. Hochul’s Good Cause Eviction was written by the real estate industry to ensure that they can keep raking in record profits while New Yorkers struggle to afford the rent and stay in their homes,” Weaver said in a statement.

The real-estate industry also has its qualms. In his own statement, Real Estate Board of New York President James Whelan said the package will help to create new housing supply, but said it “falls far short of addressing the city’s housing needs and must be reassessed in the coming years.”

Hochul has painted the housing deal as a victory, and that advocates should interpret it that way, too.

“Everybody wants what they think is the perfect deal, but this is so much more than they had, and I think I would take that as a win,” she said this week on WNYC’s “The Brian Lehrer Show.”

The budget deal also includes a number of measures Adams advocated for, including provisions that will allow the city to seek an order to shut down unlicensed marijuana stores. The state, meanwhile, will be able to keep the stores closed for up to a year while the legal process runs its course.

The deal will also allow the city to begin the process of reducing the speed limit on many of its streets from 25 to 20 miles per hour, which traffic safety advocates have been pushing for years.

The budget also includes $2.4 billion in state funding for housing and legal costs associated with the thousands of migrants that have arrived in New York City over the last two years, which falls short of the full 50-50 split Adams had been seeking.

Adams and Hochul, meanwhile, had been seeking a four-year extension of mayoral control of the city school system, which was due to expire in June.

Adams and his schools chancellor David Banks strongly advocated for the extension, arguing they should remain in charge of the city’s schools because it’s most efficient, while the prior system of local school boards before was too decentralized and sometimes corrupt. But many educators and parents called for change, saying the mayor is too far removed from the day-to-day reality of schools.

As recently as this month, legislative leaders had signaled the issue was likely to fall out of the budget entirely. But Hochul made a last-minute push, reaching a compromise on a two-year extension.

The budget language includes provisions meant to ensure the city spends its state aid to implement the mandates of the state class-size law, a major goal of the United Federation of Teachers union and many New York City parents. The state Legislature imposed the limits — which, when fully implemented, will reduce class sizes to 20 to 25 students, depending on grade level — in 2022, the last time mayoral control was up for renewal.

Adams administration officials have said the law is prohibitively expensive without additional state aid. The city’s Independent Budget Office has estimated that it would cost up to $1.9 billion per year just to hire thousands of new teachers.

The budget will also place new restrictions on Adams’ ability to appoint the chair of the Panel for Educational Policy, a 15-member board that approves certain contracts and policy decisions. Going forward, he’ll have to pick from a list of candidates selected by legislative and education leaders in Albany.

The Senate and Assembly voted to pass the budget on Saturday afternoon. Hochul is expected to sign the policy portions of the budget into law.

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