ALBANY, N.Y. — New York Gov. Kathy Hochul pitched a $216 billion state budget proposal on Tuesday that would increase education spending, fund pandemic recovery initiatives and provide bonuses for health care and front-line workers
Bolstered by federal COVID-19 funds and unexpectedly high tax receipts, Hochul sought to strike a fiscal balance as she laid out a spending plan she described as “socially responsible and fiscally prudent.”
The proposed budget includes $31.2 billion in education spending, a $2 billion increase, $10 billion to bolster the pandemic-ravaged health care industry, $1.4 billion for child care and $32.8 billion for infrastructure projects.
Accelerated tax cuts for middle-class earners and $2.2 billion in property tax relief are also included as part of the proposal as well as a plan to bring casinos to New York City.
Hochul’s fiscal plan would balance the overall budget for at least four years as it doesn’t create new recurring expenses or new programs the state can’t pay for after federal pandemic funds dry up.
“We’re not creating new expenses or programs we can’t pay for,” the Democratic governor said. “This is a once-in-a-generation opportunity to make thoughtful, purpose-driven investments in our people that will pay dividends for decades.”
She will now enter negotiations with the Legislature as they work on approving a budget for the 2023 fiscal year by April 1.
Hochul, seeking a full term in office after replacing disgraced former Gov. Andrew Cuomo last year, will enter negotiations with broad leeway thanks to the state’s surplus and money still coming in from federal pandemic aid packages.
The governor finds herself in an enviable position thanks to the state’s healthy fiscal picture, able to hammer out spending and policy plans with a Democratic-led Legislature used to butting heads with Cuomo each year.
New York’s fiscal outlook is a far cry from last year when Cuomo’s budget team predicted a $15 billion to $17 billion deficit as the pandemic stretched the state’s finances and revenue projections showed little money coming in.
Budget director Robert Mujica said the state’s current status means New York can begin putting aside more funds to fill its “rainy day” reserve coffers, with plans to have 15% of the state’s operating budget available in case of future emergencies.
Spending growth is estimated at 3.1%, just below inflation, in fiscal year 2023 and grows by an annual average of 3.6% thereafter through 2027.
Mujica noted that it’s the first time the division of budget has released a financial plan with no budget gaps for any year going forward.
He also admitted that tax increases on the wealthy implemented last year likely did not drive out rich New Yorkers, something that Cuomo had argued would happen.
Hochul, meanwhile, said the investments outlined in her budget are focused on the “realistic and achievable.”
Plans include $1 billion for health care initiatives and investments and $1.2 billion for bonuses for health care and other front-line workers. Another $4 billion is set aside for an environmental bond act and another $224 million for programs aimed at countering gun violence.
The proposal also includes $350 million for pandemic relief for businesses and theaters and other venues. On top of increases for public education, Hochul is calling for subsidies for day care providers and families that would make an additional 400,000 families eligible for services.
The governor also called for investing $1.5 billion into the State University of New York and City University of New York systems over the next five years.
Downstate casinos could become a reality sooner as Hochul’s budget also lays out a plan that would speed up the issuing permits for three available licenses not expected to be available until 2023.
Hochul, also calling for a four-year extension of mayoral control of city schools, said the investments and policy plans outlined are meant to help the state turn the page from the pandemic.
“We need to embrace this moment of possibility and use it to redefine New York’s destiny,” Hochul said. “We hope to close the books on this winter surge soon so we can turn the page and open the book on our 2023 budget outlook and focus on the post-pandemic future.”
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