More than eight weeks late, New York finally has a state budget.
The more than $268 billion spending plan is the latest in 16 years. It has now compressed the portion of the legislative session in which lawmakers and staff don’t have to balance the budget with other legislative priorities into just one week and capping off yet another successful effort by Democratic Gov. Kathy Hochul to wear down a reluctant state Legislature, also led by Democrats, on a host of policy proposals unrelated to state spending.
“It’s a record of great accomplishment,” she said. “It’s something everyone should be proud of. This is a good day, and I’m going to keep celebrating.”
After passing a record number of budget extenders to ensure state government did not shut down during negotiations, the state Senate and Assembly finished voting Wednesday evening, ensuring that Hochul will be able to tout key victories on car insurance policy reform intended to lower rates and cut down on fraud and litigation abuse, changes to the state’s environmental quality review intended to spur housing development, and other priorities.
“These are not just Kathy Hochul priorities,” she said. “They’re my priorities because they are important to New Yorkers, and I am the vehicle to get that done.”
Despite exasperation from fatigued state lawmakers, who did manage to grind concessions out of the governor and her staff, including a push to ensure the car insurance plan holds insurance companies responsible alongside the legal community, and condemnation from good-government groups for her strategy, the budget represents an election-year victory for Hochul.
She resisted the most drastic tax increases on wealthy New Yorkers pushed by New York City Mayor Zohran Mamdani and other progressives while finding back doors to raise revenue to help the city battle its financial crisis, including a pied-à-terre tax on luxury second homes in New York City.
While largely holding her ground despite technically allowing for what amounts to a new tax, she embraced Mamdani and assisted him in making strides on his signature issue: universal childcare.
“This year’s budget demonstrates our commitment. This is a signature issue for me,” she said, adding that she has been working at it for years. “We’re on a path, a rapid path, to universal childcare.”
The childcare plan, which is expected to provide universal pre-K statewide by 2029, launch a 2K program in New York City, expand the 3K program, and establish three pilot programs upstate, is not as expansive as what Mamdani hoped for.
Experts in the childcare space have also been critical of the plan for failing to provide a sustained funding mechanism for the workforce, arguing that Hochul’s and Mamdani’s plans will be difficult to implement without a solid workforce foundation. An effort by some lawmakers to include that funding mechanism in this year’s budget was not successful, but Hochul argued the state is making strides.
“There are multiple dynamics to providing universal childcare. We’ve actually been investing in the workforce for a number of years as well as brick and mortar. I needed places and I needed people before we could even offer this,” Hochul said. “I’m committed to encouraging more of a workforce. We’re also offering free tuition for people who want to go into these professions, to people who want to get a college degree.”
The governor’s victory lap comes despite escalating frustration from state lawmakers as the window closes for them to pass additional legislation before session wraps on June 4.
Sources say two constitutional amendments designed to change New York’s redistricting process in response to President Donald Trump’s efforts in other states were expected to drop Friday but will now likely be delayed until over the weekend, preventing both houses from being able to conference them until Monday.
The Packaging Reduction and Recycling Infrastructure Act is once again in the crosshairs of late-session chaos as sources say the bill’s fate remains up in the air in the Assembly.
“This is not a way to do business,” said state Sen. Pat Fahy.
Assemblymember Michaelle Solages told Spectrum News 1 that while most lawmakers understand that Hochul is simply using her power under the state Constitution to use policy changes to drive the state spending discussion, there is support among many for a change.
“Of course I’m going to say that,” she said. “I hope that we have conversations about what, as Democratic legislators, we can do to make the process fairer and more transparent. That’s what people want. They want a process where they can have their elected officials, those individuals who are closest to the people, those individually elected in districts, have the power to dictate the conversations.”
Hochul disputes the idea that New Yorkers are torn up about the late budget or her power over it.
“You’re focused on things that New Yorkers don’t care about,” Hochul told reporters, insisting that lawmakers can pass bills at any time before negotiations begin in earnest in March.
Hochul has in recent weeks criticized the Legislature’s timetable for holding hearings and crafting its own budget rebuttals and insisted that process takes until two weeks before the budget deadline.
Asked if she wanted to see lawmakers change their process, or would be open to moving the fiscal year later into the spring, Hochul brushed off the suggestion.
“We got the job done. Sausage making is never fun to watch in the process, but if you like sausage, the outcome is good. We have very good sausage this year,” she said.
Fahy pushed back on the governor’s criticisms of the Legislature’s process, calling the system “clearly broken.”
“I think that’s a bit of an overstatement,” she said of the impact of hearings and one-house drafting. “I’m in my 14th year. We’ve never had anything go this long. I remember when it was 12 hours into April 1 and we still called it on time. I remember when we could easily get it done in the first few days. I think we have got to minimize some of the policy issues.”
Still, Hochul and Democrats in the Legislature found room for compromise. Despite many progressive Democrats pushing for a more extensive package, a deal was reached to limit cooperation between U.S. Immigration and Customs Enforcement and state and local governments by banning formal 287(g) agreements and limiting the ability of ICE agents to wear masks, among other initiatives, amid criticism from Republicans that the deal will discourage state and local governments from being willing to interact with ICE in cases of serious and violent crimes.
“We will continue our policy of making sure we have cooperation when crimes are committed,” Hochul said.
Fahy said that despite being one of those pushing for a more extensive curtailing of cooperation, she is supportive of the compromise.
“It took a while, but again that’s why we call it a compromise, and I think we are still sending a message,” Fahy said.
As Hochul took her victory lap, her Republican opponent Bruce Blakeman appeared at the State Capitol Thursday morning to provide a rebuttal.
“Nothing in that budget really addressed utility bills, utility bills that are 70% higher than the national average. Nothing in that bill made us more safe; it made us less safe,” he said.
Hochul and Democratic state lawmakers don’t see it that way. One of Hochul’s most remarkable accomplishments in this budget was getting the Legislature to vote for a rollback of the state’s 2019 climate law, which she insisted would have resulted in rate hikes if left alone despite constant pushback from environmental advocates.
“I have a difference of opinion, but at the end of the day we live to fight another day,” Solages said.
But in that debate, the Legislature also got a win. The Assembly pushed for $1 billion in utility rebate checks intended to help New Yorkers with utility costs. Hochul agreed, and checks are now set to be mailed out to 8.2 million New Yorkers in the coming months.
The checks are scheduled to go out this fall and will be based on 2024 state income tax returns. Joint filers with incomes below $150,000 will receive a $200 check, while joint filers earning between $150,000 and $300,000 will get $150. Single filers with incomes under $150,000 will receive $100.
The checks have been criticized for being based on tax structure rather than actual utility bill-driven hardship, but Solages told Spectrum News 1 that money is money.
“People are making tough decisions, so every dollar we can put in people’s pockets. Some people will poo-poo the money, but others won’t, so I think every dollar we bring back to our communities is important,” Solages said.
Hochul said at a Thursday bill-signing event: “That’s what’s going to start showing up in people’s mailboxes. When they start seeing those bills come in, they’re going to see this relief come in as well and know that someone in state government actually cares about them and worries about them as well.”
Senate Minority Leader Rob Ortt echoed Blakeman’s comments, dismissing the rebate checks and other aspects of the budget.
“This budget not only failed miserably on timeliness and fiscal responsibility, but it also does nothing to address the real affordability crisis facing New Yorkers,” he said. “It fails to rein in skyrocketing energy costs. It refuses to roll back unrealistic and expensive so-called ‘green’ energy mandates that are driving up utility bills for families and businesses alike. It also fails to crack down on the fraud, waste and abuse that continue to plague New York’s Medicaid system. Instead of addressing the issues that matter most to hardworking taxpayers, Albany Democrats remain focused on spending more of your money on giveaways, freebies and politically driven handouts that do little to help the vast majority of New Yorkers struggling to make ends meet.”