Hochul lays out $227 billion budget plan for New York

The state is on track to end fiscal 2023 with an $8.7 billion surplus.
New York Gov. Kathy Hochul presents her executive state budget in the Red Room at the state Capitol Wednesday, Feb. 1, 2023, in Albany, N.Y. (AP Photo/Hans Pennink)

New York Gov. Kathy Hochul (D) on Wednesday announced her $227 billion budget plan for fiscal 2024, which includes more funding for education, health care and public safety, and money to help localities comply with her proposed housing development requirement.

The budget “will include unprecedented investments in areas that will make a positive impact on people’s lives,” Hochul said.

Despite the uncertain economic forecast, Hochul’s budget would increase overall state spending by about 2.4% next fiscal year. It would increase school funding by 10% — the largest increase ever, Hochul said — and boost Medicaid funding by 7.7%.

New York is on track to end fiscal 2023 with an $8.7 billion surplus, acting budget director Sandra Beattie said. More than half the money will be used to build the state’s budget reserves.

Hochul’s marquee proposals include $337 million for reducing gun violence and over $1 billion to treat and support people with mental illnesses. She also wants to require upstate New York communities to increase their housing supply by 1% every three years and downstate communities to increase their supply by 3% over the same period.

“It’s very doable,” Hochul said of the housing requirement, which she said would lead to 800,000 new homes being built over the next decade. Her budget includes $270 million to help local governments plan additional development and build infrastructure to support it.

Hochul’s other priorities include creating a “cap and invest” program to reduce greenhouse gas emissions, indexing minimum wage increases to inflation, expanding eligibility for child care assistance and making such assistance easier to access.

She also laid out a plan to help the Metropolitan Transportation Authority — which runs New York’s commuter rail and New York City’s subway system and buses — address a fiscal crisis. MTA ridership collapsed when the Covid-19 pandemic hit and has yet to recover.

Hochul’s plan includes spending $300 million in one-time state aid, diverting some state revenue from taxing and licensing casinos to the MTA, and raising the payroll mobility tax imposed on New York City-area businesses from 0.35% to 0.5%. Hochul would also direct the MTA to save $400 million and New York City to contribute $500 million more annually.

Hochul and the Democrat-controlled state legislature have just two months to agree on a new budget. New York’s next fiscal year starts April 1.

The debate could be contentious. Lawmakers and Hochul will likely spar over changes to the state’s bail reform law, which was a sticking point in last year’s budget negotiations. Hochul said she wants to clarify legal language that sets two different standards for considering bail.

“I am looking forward to a thoughtful conversation with the legislature about our bail laws,” she said during her budget speech. “I’ve reaffirmed my belief in the necessity of making changes. I will not turn our backs on the progress that was made. But conflicting language in the law leads to confusion and a lack of accountability for the judges who make their determinations.”

Tensions between Hochul and Senate Democrats are also running high after the Senate Judiciary Committee last month rejected Hochul’s nominee for the state’s top judge, Justice Hector LaSalle. Hochul reportedly hasn’t ruled out suing to force the full Senate to vote on her pick.

As Hochul left the room at the end of her budget announcement, a reporter asked if she had any updates to share about LaSalle. “Working on our budget, weighing all of our options,” Hochul said.