Legislature seeks to restore 'lulus' to state budget

ALBANY — A wild card in this final week of scheduled negotiations over the state budget is expected to be a lump sum of hundreds of millions of dollars in grants for legislators to dispense back in their districts this election year.

Gov. Kathy Hochul didn’t include any of the grants sought by the State Legislature in her budget proposal in January even though the state is flush with cash from federal COVID-19 pandemic relief and state tax revenues rising faster than projected. In response, the Senate and Assembly included these items — often called legislative grants or member items — in their own budget proposals.

The grants are allocations of state funds through individual legislators who can direct them to nonprofit organizations, such as social service providers and arts programs, within their districts.

The grants will be a major priority for Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie in the traditional horse-trading in the final week of scheduled closed-door negotiations over the budget, several legislators said. And in a budget of plenty, lawmakers hope the grants, which have sometimes been skimpy or eliminated by past governors, will be larger than in past years. The budget is due Friday.

Historically, critics have decried these legislative grants, also known as “lulus,” as pork-barrel boondoggles with little transparency or accountability. They cite past abuses, such as in 2011 and 2013 when two senators were convicted of receiving kickbacks from groups who received millions of dollars in legislative grants.

And there were far more common, but less notorious, pork spending, too. Among them was the $5,000 grant in 2006 that went to a cheese museum near Syracuse, while several other grants paid for Little League uniforms and to spruce up veterans’ lodges.

That spending led to reform of the decades-old system by Gov. Andrew M. Cuomo. Now member items receive greater oversight by legislative leaders and the legislators and recipients of the grants are made public.

But there is still concern. Member items in the budget now being negotiated aren’t expected to be disclosed until after the budget is agreed upon, or possibly after the budget is adopted by the legislature.

“Overall, our concern is with any kind of lump sum appropriation which is not allocated for specific purposes,” said Patrick Orecki, director of state studies at the independent Citizens Budget Commission, a nonpartisan fiscal watchdog. “At the end of the day, it’s treated as a lump sum, spent after the fact.”

He said handling public money this way “creates the opportunity for fiscal imprudence.”

And because the legislative grants are such a high priority for senators and Assembly members, the funding is a key bargaining chip in budget talks with Gov. Kathy Hochul. For example, legislators said Hochul could support the member items in exchange for legislative approval of one of her major policy issues, such as authorizing alcohol-to-go sales from restaurants or changes in the 2020 bail reform law.

Meanwhile, legislators defend the grants as a prudent use of state tax dollars.

“They go to fire companies and nonprofits, food banks and for housing issues,” said Sen. James Gaughran (D-Syosset). He said he is confident the legislative grants will be part of the final budget.

“We really haven’t gotten to the real gut-level discussions yet on the actual numbers,” Gaughran said Thursday. “That will be next week.”

Sen. Shelley Mayer (D-Yonkers) said there are three reasons why the grants directed by legislators are effective: “You know what your district needs are; they have no access to capital; and, they are doing the work of government.”

Her requests for the grants this year include a local social service  agency that saw contributions decimated by the COVID-19 pandemic and a veterans post that needs to install ramps for its older membership.

Assemb. Aileen Gunther (D-Monticello) said the grants are just a few thousand dollars out of $216 billion state budget, but can make a significant difference to a nonprofit group and the communities they serve.

She said her grants included money to pay for boots and gear at local volunteer fire companies, food pantries and a coats-for-kids program that collected nearly 900 coats.

“I think the conversation is going to begin next week,” Gunther said Thursday. “The speaker knows how important it is”