ALBANY, NY – Gov. Kathy Hochul on Wednesday unveiled a $227 billion state budget aimed at addressing some of New York City’s most pressing needs, including $1 billion to address the immigration crisis and a multi-year plan to save money for the ailing subway system. .
The governor plans to help the Metropolitan Transportation Authority meet its $3 billion budget deficit by 2025 by raising taxes on local businesses that benefit from the transportation network, generating more than $800 million in revenue. The governor also proposed diverting money from three casinos planned in New York City to help local officials, and asked the city to contribute about $500 million, all of which would add $1.3 billion to the annual increase in subway costs. .
“The economy of New York City drives the state of New York and the MTA helps drive the economy of New York City,” said Ms. Hochul after releasing her budget proposal in the red room of the State Capitol. “So it’s very important for all of us.”
Ms. Hochul’s budget proposal officially kicks off the annual negotiations between the governor and lawmakers on how to spend more than $220 billion in the 2024 fiscal year, which will begin on April 1.
The talks are expected to reveal ideological differences and conflicts between the governor, an independent Democrat who wants to establish his seat in Albany after winning his first term, and the left-leaning Democrats who control the State Legislature, who already are. they challenged him well this year.
Just two weeks ago, a Senate committee rejected a nominee for chief justice, a stunning defeat that marked the first time a New York Supreme Court nominee has been rejected, and one that could delay the budget debate.
The governor’s spending comments were as much about the state’s finances as Ms. Hochul’s about politics, as she continues to portray herself as a problem-solver who is also committed to the best interests of her party.
As such, Ms. Hochul donated more than $1 billion to reimburse local governments for spending on emergency refugee assistance; the increase in total health care spending, including $27.8 billion for Medicaid; and increased spending on public education, including $34.5 billion in school districts, or 10 percent more than the previous budget, a significant year-over-year increase.
Although he did not want to raise taxes, he decided to extend the tax hike on big businesses that is expected to expire at the end of this year for another three years, possibly putting the left side of the party, which has called on him to act. permanent tax increase.
But he also proposed raising tuition at public colleges and opening the door to more college tuition, which drew criticism from Democratic lawmakers, including Carl E. Heastie, the speaker of the Assembly, who said raising tuition would be “difficult.” pregnancy.
The governor’s subway plans were also pushed by Mayor Eric Adams of New York City, a trusted ally who praised Ms. Hochul’s budget plan, but said a $500 million commitment “would further destroy our existing economy.”
The governor’s spending plan was also riddled with dire warnings about future economic meltdowns, which he used to justify some of the fiscal measures he enacted.
Expecting lower taxes due to the recession this year, Ms. Hochul predicted that the state would face a budget gap of $5.7 billion in fiscal year 2025, and a gap of $22 billion between 2025 and 2027. In stark contrast to Ms. Hochul’s budget plan from last year, which did not predict any budget deficit in future years, mainly due to the increase in tax revenues and federal pandemic aid.
In order to deal with future financial problems, Mrs. Hochul decided to increase the amount of money that the government can spend on saving its money, using the 8.7 billion dollars that is left this year. Under his plan, the state will increase spending by $20 billion by the end of this fiscal year, bringing the total to more than 15 percent of federal spending.
In the next two months, Ms. Hochul and the progressive branch of the Legislature can significantly affect the money spent on child care, housing and public schools, but there are also non-financial issues that can cause divisions.
The governor called for a third round of state law reform, a political issue that has been divisive for years among Democrats at the State Capitol, pitting criminal justice reform against fear of crime.
The governor wants to give judges more freedom in granting bail, saying Wednesday that he “looks forward to a serious discussion with the Legislature about our bail laws.”
While governors tend to have more power during the budget season, Ms. Hochul will enter the negotiations weak on the political side, but she may also be reluctant to disagree with lawmakers she might see passed.
State Sen. Brad Hoylman-Sigal, the Democrat who chairs the Judiciary Committee, which blocked Ms. Hochul’s chief justice nomination, said lawmakers respect the governor’s role as a budget maker, but will challenge him “professionally and respectfully” on what he can do. . he did not agree with it.
“I think there have been lines drawn by progressive lobbyists on things that bring up the budget,” Hoylman-Sigal said. “So this will be a moment, I hope, where we can acknowledge that New York’s needs are so great that we need to seek the help of wealthy individuals and corporations to address them.”
There were also several proposals that would benefit charter schools in New York City, including a measure to increase per-student funding by 4.5 percent over the current plan, and one that would end the number of charter schools in the city.
The move, which was promoted by Ms. Hochul’s Republican opponent, former Representative Lee Zeldin, in the last election, may find opposition among the teachers’ unions that supported Mrs. Hochul, as well as Democrats.
On Wednesday, State Senator John Liu, a Democrat from Queens who chairs the New York City Education Committee, called Ms.
“In the past, this cap has helped create a balance between giving parents what they say they can choose and what the law requires for public schools to be open,” he said. “It’s not wise to mess with those feelings.”
The governor’s tuition increase of 3 percent for the State University of New York and City University of New York systems is also opposed by Democrats, as well as student leaders, as Ms. Hochul described them as “modest. .”
The tuition increase has fueled calls from a coalition of activist groups to raise taxes on the wealthy to pay for left-wing policies, such as universal child care and tuition-free in-state college.
Ms. Hochul proposed one tax increase: Raising the tax on cigarettes from $1 to $5.35. They will also move to ban the sale of all types of tobacco, expanding the current ban on electronic cigarettes.
To support the MTA, Ms. Hochul has provided $300 million in one-time state aid to deal with a significant drop in revenue due to the coronavirus pandemic, which has significantly reduced the number of workers such as white collar workers – and their prices. – he said. stopped traveling a lot and worked from home. Many people have also stayed away from the subway because of the continued fear of Covid-19 and crime.
The government’s efforts, previously reported by The Wall Street Journal, are expected to stem the decline in employment, but will not prevent the rise of trains and buses.
The governor said he plans to change 421a, a tax break that is about to expire to encourage New York City developers to build affordable housing. However, he did not include a replacement program in his budget proposal, choosing to work with state lawmakers on a new program after defeating his proposal last year.
But Ms. Hochul announced her intention to extend the period – from June 2026 to June 2030 – that must be completed in order to benefit from the tax that has now expired. Industry groups, which celebrated the expansion on Wednesday, said many projects, which would otherwise have been eligible for tax refunds, are at risk of not being built again because they will not meet the deadline.
One of the most important proposals in the budget Ms. Hochul would allow the New York Power Authority to develop and operate renewable energy projects. The idea has been circulating in Albany for several years, and was an issue pushed hard by progressive Democrats in the last legislative session.
The budget proposal also included a $455 million loan to the New York Racing Association to renovate Belmont Park, replace the iconic track and make other improvements to allow year-round horse racing. This could pave the way for the state to turn Aqueduct Racetrack in Queens into a full-fledged casino.
Reports were contributed by Mihir Zaveri, Jay Root, Grace Ashford and Ana Law.
