Gov. Cuomo Proposes Congestion Pricing, Marijuana Legalization in New York Budget

By Jimmy Vielkind

Jan. 15, 2019 3:04 p.m. ET

New York Gov. Andrew Cuomo on Tuesday proposed a $175 billion budget that would implement congestion pricing in New York City, legalize marijuana for people over 21 and advance a slew of nonfiscal policies, from bans on stretch limousines and plastic bags to limits on cash bail.

Mr. Cuomo, a Democrat in his third term, opted to use the budget as a vehicle for policy initiatives he says are part of a justice agenda that responds to Republican-backed policies emanating from Washington. He previously had outlined his priorities in speeches on Ellis Island and in Manhattan, but reiterated his agenda in an address to lawmakers that coincided with the release of budget legislation.

The governor’s 80-minute speech also had the pomp of a State of the State address, including an audience of legislators. He praised Senate Majority Leader Andrea Stewart-Cousins of Yonkers, the first Democrat to hold that post in a decade, and said a unified Democratic government would make record accomplishments.

“It’s a lot. No doubt about it. But there’s been a lot that’s been bottled up for many, many years that we couldn’t get done,” he said.

The new details of Mr. Cuomo’s marijuana plan include a three-tier system for its distribution and sale, as well as the creation of a new state Office of Cannabis Management. Mr. Cuomo said this week the program would generate up to $300 million in taxes, but budget documents show the state is estimating no revenue for the coming fiscal year and $83 million for the following year.

Marijuana sold by wholesalers to retailers would be taxed at 22%, with 20% going to the state and 2% to the county in which the retailer is located. State funds would be earmarked for traffic safety, small-business development, substance-abuse prevention and other research, according to budget documents.

New York is bowing to pressure from its neighbors on marijuana policy. Retail sales of marijuana started this week in western Massachusetts. Lawmakers in Canada, New Jersey and Rhode Island are considering marijuana legalization. Mr. Cuomo said counties and large cities would have the ability to ban marijuana dispensaries within their borders.

The governor also included a toll for vehicles that enter Manhattan below 60th Street. The congestion-pricing plan, which met resistance among legislators from suburban counties and the outer boroughs in 2018, would raise $15 billion in coming years for capital improvements at the Metropolitan Transportation Authority, which operates subways, buses, bridges, tunnels and commuter railroads around New York City.

Under Mr. Cuomo’s proposal, an MTA subsidiary would set the rates, and drivers would be credited for money they spent on tolls for the Henry Hudson Bridge or any of the four tunnels that lead into Manhattan.

The governor said additional capital needs—the authority says it needs $40 billion in the next decade just to modernize the subway—should be split between the state and New York City. He said he would push for a restructuring of the MTA, but didn’t offer details.

New York City Mayor Bill de Blasio, a Democrat, traveled to Albany for the budget announcement. He has opposed Mr. Cuomo’s efforts to have the city fund more of the MTA’s costs.

The budget proposal also would revive a perennial fight about school aid. Mr. Cuomo has proposed to increase aid to public schools by $1 billion for the 2019-20 school year, bringing the total to $27.7 billion. The state’s Board of Regents had requested a $2.1 billion boost.

Mr. Cuomo said he would push for a new funding formula to ensure money is directed to school buildings that most need it. Assembly Speaker Carl Heastie, a Democrat from the Bronx, said members in his chamber want more money for schools. “We want to make sure our children have all of the necessary tools,” he said.

The plastic bag ban was one of several proposals that Mr. Cuomo couched as part of a “Green New Deal.” It also includes goals to reduce emissions from power plants and develop more offshore wind farms.

The budget would renew, for five years, the state’s top income-tax rate on New Yorkers reporting more than $1 million. It also would make permanent a 2% cap on annual increases in local property taxes.

Republicans have long pushed for the tax cap. Senate Minority Leader Joe Griffo, a Republican from Oneida County, said Mr. Cuomo should do more to cut taxes and regulations.

“Governor Cuomo will brag about putting forward the most progressive budget in the nation but it’s not the kind of spending plan most New Yorkers want or need,” Mr. Griffo said in a statement.

The spending plan projects a drop-off in the state’s largest funding stream: personal income taxes. Because of market volatility, the state reduced its projections by $396 million for the current fiscal year, and $1.6 billion for the next fiscal year. The state is projecting deficits for the following years. Mr. Cuomo blamed the reduction on federal policies.

Write to Jimmy Vielkind at Jimmy.Vielkind@wsj.com

Member Login
Welcome, (First Name)!

Forgot? Show
Log In
Enter Member Area
My Profile Not a member? Sign up. Log Out