Updates: New York ‘Conceptually’ Has a Budget
Kathy Hochul and the legislators are closing in on a final state budget. As they settle their differences, we’ll keep you up to date on the latest.
We’ve had our eye on the budget since the very beginning. Watch it with us to the end.
You can also peruse the budget bills yourself, here.
We’ve had our eye on the budget since the very beginning. Watch it with us to the end.
You can also peruse the budget bills yourself, here.
Sam Mellins
MAY 1, 1:10 PM — The governor holds most of the power in budget negotiations — but she’s had trouble wielding it this year. Governor Kathy Hochul was forced to scale back or eliminate many of her signature proposals for the final state budget, such as changing the state’s bail laws and increasing the number of charter schools.
The biggest winner in the budget might be suburban moderates outside New York City, who defeated Hochul on several fronts — most notably, her proposals to raise their taxes to fund mass transit and to require them to build more housing.
Suburban Democrats mounted fierce opposition to the “New York Housing Compact,” the governor’s plan to double the state’s housing production over the next decade, largely by mandating more housing near train stations and requiring every town to grow its housing stock by a set amount. They argued that rather than ordering towns to add new housing, the state should offer them cash incentives to build. Similar incentive programs have been tried in other states and largely failed.
Unable to win over suburban opponents or get leaders in the legislature to override them, Hochul pulled the compact from the budget in late April, reasoning that an incentive-based program would be worse than doing nothing. She said that she will take executive actions and work with the legislature after the budget to increase housing supply, but hasn’t yet said what that will look like.
Housing wasn’t the only area where suburbanites won big in this budget. Another major topic was protecting the financial future of public transportation: Seeking to prevent future budget gaps, lawmakers cobbled together an MTA funding package that includes over $1 billion in tax hikes on the largest employers in New York City.
Though the suburbs benefit extensively from the Metro-North and Long Island Railroad train systems, which the MTA operates, Hudson Valley and Long Island legislators pushed to exclude suburban businesses from the tax hikes — and won. Hochul’s initial payroll tax proposal would have cost those businesses about $200 million a year, according to a report from the Fiscal Policy Institute.
The suburban wins leave some legislators from New York City fuming over what they see as suburban ingratitude for major state investments. During this year’s budget process, Hochul opened the Grand Central Madison train terminal, completing a multi-decade, $11 billion project to bring Long Island Railroad trains directly to Grand Central Terminal. Last fall, Hochul opened the Long Island Railroad’s Third Track, an over $2 billion project to increase service and renovate several train stations. These projects will serve the same New Yorkers who most fervently opposed new housing near transit and dodged new taxes to support the MTA.
“We’ve spent tens of billions of dollars on infrastructure to bring better railroad access to Long Island. I do not know why we are not finding ways to build more housing on Long Island especially,” said Assemblymember Robert Carroll, who represents part of Brooklyn.
MAY 1, 11:05 AM; updated May 2, 4:31 PM — The long wait is almost over. On Sunday night, one month late, the Assembly and Senate began publishing the legislation that will make up New York state’s final budget for the coming year. The full budget is a package of 10 bills, broken into two categories: appropriation bills, which deal directly with revenue and spending, and Article VII bills, which detail a wide range of associated policies. As of Tuesday, all the bills have been printed, and five have passed. (One bill, governing the state’s debt payments, was already voted on back in March.) All 10 bills are expected to be voted on this week, with Governor Kathy Hochul’s signature likely to follow in short order — finalizing this year’s budget, at long last.
Appropriation Bills
Article VII Language Bills
We’ll be updating this list as the remaining bills are voted on — and, of course, digging into them to bring you key updates on the final budget.
Sam Mellins
MAY 1, 10:15 AM — In the lead up to this year’s budget, Governor Hochul and lawmakers publicly disagreed on issues ranging from bail to housing to clean energy. But in one area, there was near total agreement: shelling out billions of dollars in corporate subsidies.
With next to no public opposition from lawmakers, Hochul and the legislature agreed to include a package of new subsidies worth more than $8 billion in this year’s budget. Three industries will see most of the benefit: movies and TV, musical theater, and horse racing.
There’s one thing that these subsidies have in common: flimsy economic evidence to justify them. Studies produced by their backers are often riddled with flaws, while independent reviews find little or no evidence that the programs work to promote economic growth.
“It’s pretty amazing and terrible that that’s the one thing they can actually agree on,” said Elizabeth Marcello, analyst at the nonprofit Reinvent Albany, which has opposed the subsidies. “At the end of the day it’s all corporate giveaways, none of it works, and none of it will grow a more just and equitable New York.”
By far the biggest subsidy item is an increase in funding for the “film tax credit,” a program that essentially allows film companies to bill the state for up to 30 percent of their production costs. First created in 2004 as a $25 million program, the budget bumps its cost up to $700 million annually, adding up to more than $7 billion before the program’s current 2034 expiration date.
The state claims that the film tax credit pays for itself and creates tens of thousands of jobs. But those claims are based on deeply flawed assumptions, like that no filming at all would happen in New York without the tax credit, or that one person working on two movies counts as two jobs created. New York state has never shown that the film tax credit brings in more money than it costs, and a recent analysis put the program’s cost at over $65,000 per-full time job created.
Another half-billion dollars will finance the renovation of the Belmont horse racing track on Long Island. Horse racing attendance and revenue has been plunging for decades, despite massive state subsidies, suggesting that this year’s deal is likely throwing good money after bad.
Asked by New York Focus to justify the subsidy, Hochul cited an industry-commissioned study that found the renovation will create hundreds of jobs and bring a quarter-million new fans to the track each year. But the study didn’t include evidence for these claims, and the study’s author was unable to provide any when interviewed by New York Focus.
Though the half-billion in cash is technically a loan, the industry will pay the state back with public money that it gets from existing state subsidies — ensuring that those subsidies continue for the life of the loan and meaning that the public will ultimately shoulder the full cost.
Finally, a tax credit that refunds musical theater productions for part of their costs is also slated to be extended and expanded by $100 million a year. While it was launched in 2021 to help Broadway recover from the pandemic, it now looks set to become a permanent annual giveaway to the industry. The state hasn’t offered any evidence that the credit gives New York a positive return on its investment.
The budget also won’t include two attempts to get rid of existing subsidies. The Senate proposed eliminating a law that exempts Madison Square Garden from paying property tax, saving it over $40 million a year, and also proposed eliminating a subsidy for investments in low-income areas that also costs the state tens of millions a year. Neither proposal made the final budget.
The final budget did exclude two subsidies Hochul had backed, however: one to replace the controversial 421-a tax break for real estate developers, and another to subsidize businesses near public university campuses.
Colin Kinniburgh
APRIL 28, 1:55 PM — Housing was the big loser in this year’s state budget, as Governor Kathy Hochul and the legislature failed to reach agreements on tenant protections, building more apartments, or rental vouchers for the most vulnerable New Yorkers. But it wasn’t a total wash for low-income tenants. Hochul announced on Thursday that the final budget will include $391 million in new funding for the Emergency Rental Assistance Program (ERAP), a pandemic-era rent relief program. That money will be directed to public and subsidized housing residents who had previously been excluded.
“This is the one thing that’s survived the talks over the past month,” in contrast to every other housing issue, said Assemblymember Grace Lee, who pushed for the funding. The $391 million is slightly higher than what the legislature requested, reflecting a dire need on the part of subsidized tenants and the housing authorities they rent from. Unpaid rents tipped the already struggling New York City Housing Authority into financial crisis during the pandemic, further hampering its efforts to conduct repairs and keep its buildings in livable condition.
The rent relief deal will provide a much-needed Band-Aid. But it falls far short of the total need, said Iziah Thompson, senior policy analyst at the Community Service Society, pointing to estimates NYCHA has provided of its total arrears.
As of March, NYCHA had $466 million in rent arrears, according to a spokesperson. But it was only able to submit $128 million worth of ERAP applications, covering 33,000 households, before the portal closed in January.
Senate housing committee chair Brian Kavanagh said he was confident NYCHA would get “significantly more” than the $128 million needed to cover existing applications, but wouldn’t give an exact number, citing ongoing negotiations.
Kavanagh said the ERAP application portal would not reopen for individual applications, but that additional funding would go through NYCHA directly. He called the state budget deal a “very significant achievement” but said New York City and the federal government will also need to pitch in to close NYCHA’s yawning budget gap.
Thompson, of CSS, lamented the state’s decision to exclude subsidized tenants from ERAP in the first place, and said it was dicey to count on the city as a backstop.
“The really scary thing is that NYCHA is going to have trouble managing housing. … They are coming up really close on having no reserves left” to fund their day to day operations, Thompson said.
Nor will the budget deal plug NYCHA’s deeper financial hole: a repair backlog of more than $40 billion. A Senate source told New York Focus that the final budget would likely include $135 million in new “capital” funding for NYCHA, which pays for those major repairs — a sum one lawmaker called “shameful” in light of the total need.
Speaking to New York Focus before Hochul’s announcement, Lee declined to provide specific numbers but called the expected budget deal “positive” and said it reflected a “commitment to support public housing residents, subsidized housing residents, by the legislature and the governor.”
Lee noted the funding wasn’t just for NYCHA.
“Obviously, NYCHA is the largest public housing authority in the state,” Lee said, but there are close to 100 such authorities statewide, and they are “really struggling right now.”
The state launched ERAP in June 2021 to provide direct rental assistance to New Yorkers who had fallen behind on payments during the worst of the Covid-19 pandemic. It has so far disbursed nearly $3 billion, mostly federal funds.
Public housing residents and tenants who use Section 8 rental vouchers have seen none of that money: The ERAP law mandates that the office processing payments put applications from those groups at the back of the queue. As of April 10, less than 60 percent of the nearly 405,000 households that applied for ERAP had received the assistance.
Senator Julia Salazar said she was encouraged to see new rent relief for subsidized tenants in the budget, but was still waiting for final estimates of how much NYCHA tenants would actually receive. And she called the expected $135 million for repairs “insulting.”
The Senate had originally requested $350 million in capital funding for NYCHA, making it the only one of the three chambers to press for any new repair money at all.
“The city, state, and federal government continue to fail to directly invest in our public housing and take responsibility for the conditions in NYCHA developments,” Salazar said. “NYCHA residents who are my age have had a government slumlord their entire lives because no executive has had the political will to reinvest in public housing.”
This post has been updated to include comments from Sen. Brian Kavanagh.
Chris Gelardi contributed reporting.
Chris Gelardi
APRIL 28, 9:49 AM — On bail, Governor Kathy Hochul has gotten what she wanted — or so she says.
Announcing a “conceptual” agreement for the annual state budget Thursday night, the first policy Hochul highlighted was a measure to eliminate what is known as the “least restrictive” standard in New York’s pretrial law. It was a core demand of her budget proposal — and one of the biggest holdups in the nearly month-too-long budget negotiations. She presented it as a win at her press conference, but on a closer read, the key change looks largely cosmetic.
The original measure Hochul proposed in February — which eliminated “least restrictive” plus other legal language — would have upended the way judges are instructed to make bail decisions. Instead of only considering what is necessary to ensure that defendants “return to court,” as has been New York law for decades, it would have given them essentially free rein. The plan would have opened the door for judges to consider defendants’ perceived “dangerousness,” which law enforcement and tough-on-crime politicians have held as a goal for years.
But that’s not what the agreement is.
While current law states that judges must set the “least restrictive” conditions to ensure that defendants return to court, the new agreement tells them to set the “kind or degree of control or restriction necessary” to get them to show up, a Hochul cabinet member explained at the press conference.
While many have fixated on the “least restrictive” language, the more essential legal condition is that judges focus on getting defendants back into court. The new agreement doesn’t change that.
“The major headline is that the goal of bail remains to be to ensure the person returns to court,” said Krystal Rodriguez, policy director of the Data Collaborative for Justice at John Jay College.
In fact, the “kind or degree” language is lifted directly from New York’s bail statute as it existed before the state’s contentious 2019 bail reforms. But, unlike the reforms’ other changes to bail law, this one was mostly semantic: Both pre-2019 and post-2019, judges have only been allowed to set bail or other pretrial conditions in order to ensure that defendants return for future court dates. No “dangerousness” — not now, not then. (Though whether judges actually follow the law is a different question.)
“The core of bail reform is still protected and we anticipate little change after the removal of the least restrictive language,” said Jaeok Kim, associate director for research at the Vera Institute’s Greater Justice New York program.
The changes may instead be geared toward scoring political points. Coming off of high-profile losses on court nominations and housing, Hochul wanted a win on bail — a topic on which she dug in her heels for weeks. The technical change lets her spin it as a victory — and at a moment when the national Democratic Party is pressuring her to look tougher on crime.
Hochul hinted that the bail changes were more about appearance than substance when answering a query from a New York Post reporter Thursday night: Referring to crimes committed by people released pretrial, she said, “there’s some horrific cases splashed on the front pages of newspapers.”
Some legislators still think that the proposal will result in expanded use of bail and pretrial jailing. The announced measure “would result in more Black, brown, and poor people being detained pretrial,” Assemblymember Latrice Walker, who had gone on hunger strike to protest Hochul’s proposed bail changes, said in a statement Thursday night. A spokesperson for Walker, one of the original sponsors of the 2019 reforms, did not respond to New York Focus’s questions before press time. Nor did Hochul’s office.
It’s entirely possible that judges use the change as a greenlight to surreptitiously consider dangerousness in bail considerations, of course. Many already do. And “kind and degree of control or restriction necessary” sounds less limiting than “least restrictive.”
But that’s yet to be seen. When it comes to the letter of the law, this agreement changes little.
Colin Kinniburgh
APRIL 27, 5:35 PM — Negotiations continue over the push to enable the state-owned New York Power Authority to build renewable energy projects. Backers of the legislation say talks between the governor’s office and the legislature have brought the budget proposal within striking distance of the full Build Public Renewables Act (BPRA), which has twice passed the Senate but has yet to find consensus in Albany.
Assembly BPRA sponsor Robert Carroll of Brooklyn said he was “cautiously optimistic” that the final legislation would include a mandate for NYPA to build if the state falls short of its renewable energy targets — something Governor Kathy Hochul’s budget proposal didn’t include. Public power backers are hopeful that the final version will include labor protections, in line with draft language Politico obtained last week. And Lee Ziesche, a spokesperson for the Public Power NY Coalition, said there has been discussion of closing NYPA’s fossil fuel peaker plants by 2030, five years earlier than Hochul proposed.
But Carroll doesn’t expect a final budget announcement until at least Monday, and he said there could yet be surprises.
“What exactly is in the budget is still to be determined, but I do think that we’re going to have a proposal that allows for NYPA to build, own, and operate renewable energy” and “to meaningfully step in when the private sector is not working,” Carroll said.
BPRA opponents are still working to limit the reach of the legislation, which they worry could encroach on private developers’ efforts to build clean energy in New York. Gavin Donohue, president of the power industry trade group Independent Power Producers of New York, told New York Focus he has backed various provisions to “contain NYPA’s authority” — including a sunset clause that would give the bill an expiration date, limiting NYPA’s expanded authority to a certain number of years.
“Maybe you confine these projects to a cap, how many megawatts they can actually produce. Or you say that they can only do projects, for example, in some disadvantaged communities where they’re saying low-cost power should be delivered,” Donohue suggested. He said these proposals had been “discussed at the table” but he did not know how seriously.
Anne Reynolds, executive director of the Alliance for Clean Energy NY, said she has sought language that would restrict NYPA’s ability to bid on contracts with the state energy authority NYSERDA.
“We don’t think it’s a level playing field to compete with a state agency to get a contract from another state agency,” Reynolds said.
Moreover, “NYSERDA has a certain amount of renewables that they’re setting out to buy,” she noted. “If NYPA wins a contract over a private developer, that doesn’t mean more renewables get built, it just means someone else is building them.”
Public power backers hope private developers’ concerns will be mollified by an additional provision they’ve recently brought into budget talks, which they say would expand NYPA’s role in connecting more renewables — private and public — to the grid. Transmission and interconnection have been major stumbling blocks for deploying renewables, and a big headache for the private developers who build them. But Carroll and Ziesche could not immediately provide details on the proposal, and Reynolds remains skeptical in the interim.
She did voice relief that a separate proposal to allow private utilities to build renewables — reportedly floated in budget talks — appears to have been withdrawn.
“We flipped out” when that was put on the table, Reynolds said. But that “fire drill” is over, for now.
Sam Mellins
APRIL 26, 3:13 PM — New York’s lowest paid workers will see a raise in this year’s state budget, Governor Kathy Hochul announced Tuesday — but one that will leave New York trailing other states and dozens of cities.
Under a deal worked out with leaders of the Democratic-controlled legislature, the minimum wage will rise to $17 by the end of 2026 in New York City and its suburbs, and 2028 upstate. After that, it will rise automatically each year in tandem with inflation.
The proposed hike, which was first reported by Spectrum News, is slightly more generous than Hochul’s original proposal, which she unveiled in January. That plan would have tied the minimum wage to inflation with no initial increase, and was likely to result in raises about 50 cents per hour smaller than the current version.
It’s also far less than what major labor unions and political figures like Attorney General Letitia James were pushing for. They backed a bill, sponsored by labor committee chairs Senator Jessica Ramos and Assemblymember Latoya Joiner, to raise the state minimum wage to $21.25 by 2027. “It is time we pay you what you deserve,” James told a rally of union members on April 10. “It is time we address the felt needs of New Yorkers and members of unions.”
It’s been seven years since New York politicians last agreed to raise the minimum wage — and that time, workers saw a much bigger boost. In 2016, Andrew Cuomo struck a deal with the legislature, which at the time was partially controlled by Republicans, to gradually raise New York’s minimum wage from $9 to $15 per hour. The full bump took effect in New York City in 2018, its suburbs in 2021, and is still being phased in for upstate New York.
Cuomo’s wage hike meant that in New York City, minimum wage workers got a two-thirds raise in less than three years. Under Hochul’s proposal, the city’s lowest-paid workers will see their paychecks grow by just a tenth in that same time span. For workers upstate, it’ll be about twelve percent.
New York lawmakers, meanwhile, increased their pay by 29 percent last December, making the legislature the highest paid in the country.
New York used to have the highest minimum wage, too; the 2016 legislation made it the national leader, along with California, which passed a $15 minimum wage law that year with a longer phase-in period.
“The message was this is no longer just a rallying point. This is no longer just something to do to win races or get headlines. This is real,” said Rich Azzopardi, who served as a senior advisor to Cuomo. “To have the biggest blue states in the nation do it at the same time, creating pressure on both coasts, I think was huge overall for the movement.”
Indeed, others followed New York’s lead — and leapfrogged it. Minimum wages above $15 are already in effect in California and Washington, as well as cities including Denver, Washington, DC, and — to the consternation of some progressive lawmakers — Flagstaff, Arizona. All of those states and cities have automatically increasing minimum wages that are projected to remain ahead of New York’s over the next several years.
Colin Kinniburgh
APRIL 25, 2:57 PM — With criminal justice and housing debates wrapping up after weeks of stalemate, climate issues are finally having their day in the negotiating room. Talks went on through the weekend on big-ticket items like building public renewables, banning gas in new buildings, and cap and invest — the latter of which has faced stiff resistance from the Assembly. But on Tuesday, sources told New York Focus that a cap-and-invest deal may be emerging after all.
The policy, Hochul’s flagship proposal to slash greenhouse gas emissions, would put a price on carbon, with potentially major implications for the state’s economy — starting with energy bills.
After Hochul proposed a bare-bones version of the plan in February — leaving the stickiest decisions up to her executive agencies — the Senate counter-offered a detailed version that would ban the trading of emissions allowances, limit exemptions for energy-intensive businesses, and steer revenues from the program into four spending areas, as demanded by the NY Renews coalition. The Assembly declined to include cap and invest in its budget proposal at all.
In late March, environment committee chair Deborah Glick and energy chair Didi Barrett told New York Focus that the policy would have no fiscal impact this year and didn’t belong in the budget. Assembly leadership held that line for weeks.
But as the ice began to thaw on Monday, an Assembly staffer told New York Focus, “Everything is tied into cap and invest right now.”
One advocate who has followed the negotiations closely said that the latest proposal on cap and invest is close to Hochul’s original — establishing the program in law and allocating a portion of revenues for rebates to consumers, but leaving the policy details up to regulators.
The legislature would miss a big opportunity if cap and invest fell through in the budget, said Anne Reynolds, executive director of the Alliance for Clean Energy NY, who helped draft the cap-and-invest proposal as a member of the state’s Climate Action Council. “To the extent the legislature is interested in paying for the climate plan, this is the way to do it.”
But there hasn’t been a lot of good will to go around on cap and invest in recent weeks. Hochul’s sudden bid to overhaul how New York counts emissions “poisoned the issue for fruitful discussion in the budget,” Reynolds said.
Some advocates say the state still has time to make cap and invest work — and that it might actually be better to settle outside of the budget, which is largely negotiated behind closed doors.
A proposal as sweeping as cap and invest deserves its own set of public hearings, said Anthony Rogers-Wright, director of environmental justice at New York Lawyers for the Public Interest and a steering committee member of NY Renews. “Let’s make sure that it’s transparent, because the public absolutely has the right to weigh in, because this impacts their lives directly.”
But NY Renews as a whole is still determined to see cap and invest in this year’s budget, with all the provisions included in the Senate’s proposal.
Proponents worry that the push to put a price on carbon will lose steam if it’s not included in a final budget deal. But Reynolds said that might not stop the state from moving forward with the proposal. New York’s climate law gives the Department of Environmental Conservation broad latitude to impose emissions caps, she said, and Hochul’s administration will likely press on with the regulatory side of the program, whether the legislature embraces it or not.
“One would have thought the legislature would have liked to weigh in,” Reynolds said. “Why wouldn’t they want to take credit?”
Taking responsibility for such major legislation is a double-edged sword, though. If carbon pricing ends up increasing costs to consumers, as many fear, any credit for the program could quickly turn into blame.
Jake Indursky
As the state budget begins to take shape, a well-connected construction firm is pushing for a last-minute cut – and is providing the latest example of Albany's lax campaign finance rules for companies that do business with the state.
LeChase Construction, a Rochester-based firm, is seeking over 200 million dollars to revamp 27 service areas along the New York State Thruway. Although Empire State Thruway Partners, a state contractor overseeing the project, once assured Albany that the project would not require any taxpayer dollars, State Senator Jeremy Cooney – chair of the chamber’s contracts and procurement committee – is now pushing for a state rescue.
LeChase is already a major recipient of state contracts: Currently, the company has over $100 million in active contracts for construction projects. It’s also a prolific funder: in the past 20 years, the company and its employees have spent over $1.2 million in New York State elections.
Governor Kathy Hochul, who will have the final say on any subsidy, has accepted $15,000 from LeChase CEO William Goodrich over the last three years. Cooney has accepted $6,500 in campaign donations from the company and its president, William Mack, since 2020. In addition to prioritizing funding for the Thruway project, Cooney is also pushing for a cost of materials increase for contracts signed during the pandemic, which could aid the Thruway project, according to his office.
All of this is perfectly legal in Albany, where politicians considering whether to dole out taxpayer funds to private companies are free to accept donations from the bidders in question. It wouldn’t fly in New York City, which caps donations from companies with business before the city at $400.
Last year, the Senate passed a bill to ban companies bidding for state contracts from making political contributions to “officeholders with any direct influence over the outcome” – in most cases, the governor – but the legislation died in the Assembly. It had 61 supporters in the Senate – including Cooney.
“Campaign contributions do not have an impact on the Senator’s governmental work,” a spokesperson for Cooney told New York Focus. “Senator Cooney is concerned about the potential loss of jobs in Rochester and across upstate for union workers and MWBE subcontractors if LeChase were met with significant financial hardship for the second phase.”
And the $200 million award faces steep odds. Rochester Assemblymember Harry Bronson, who has publicly urged Hochul to reject LeChase’s request, told New York Focus that he sees “very little appetite for this bailout.”
Senator James Koufis denounced the vendors’ “decision to pursue hundreds of millions in back-channel taxpayer handouts (after swearing up and down they wouldn't need them).”
Blair Horner, executive director of New York Public Interest Research Group, argued that LeChase’s payday could still get pushed through.
“On the way that these guys handle the budget, there'll be secret negotiations, we won't know anything until the very end,” Horner said. “And the public who pays for all of this stuff won't even know until after the fact.”
