Your One-Stop Guide to the 2023 New York State Budget

Total spending: New York’s spending will come out to $229 billion this year, Hochul said, in between her original $227 billion proposal and the Assembly’s $233 billion. Once inflation is factored in, this means that the state’s overall spending level is essentially unchanged from last year’s $222 billion budget.

Reserves: We won’t know how much New York plans to save in reserves until the budget department releases a financial plan in the coming weeks. Hochul proposed stashing away $10.6 billion, while the Assembly proposed $6.2 billion. The final number wasn’t in the text of the budget, and the Hochul administration didn’t supply it when asked.

Minimum wage: Albany agreed on a statewide minimum wage of $17 an hour, with further increases tied to inflation under certain conditions. The deal slightly more generous than what what Hochul initially proposed: In her January State of the State address, the governor called for indexing the wage to inflation without another immediate increase. Legislators and unions wanted to raise it higher, some up to $21.25.

The $17 minimum wage will be phased in by 2026 in the New York City area, and by 2028 upstate. Once the wage hits $17, further increases tied to inflation will occur in years in which inflation goes up and unemployment does not.

Asylum seekers: New York City will get $1 billion to fund housing and social services for the over 50,000 asylum seekers who have arrived in the city over the past year. Mayor Eric Adams has estimated the cost to the city at $4.3 billion, and has repeatedly asked the state and federal governments for additional resources to help deal with the population influx.

Foundation aid: Hochul proposed a $2.7 billion boost to “foundation aid,” the term for the main mechanism the state uses to fund public grade schools. Both houses accepted this proposal.

Charter cap: New York will allow up to 22 new charter schools to open statewide, with 14 of them in New York City. Hochul’s original proposal would have allowed dozens more charters in New York City by removing its current legal limit of 275, while keeping in place a statewide limit of 460. The legislature had not proposed any new charters, and it succeeded in dramatically scaling back Hochul’s proposal.

CUNY and SUNY capital projects: Both the state and city university systems will see significant increases in cash available for new projects and infrastructure. The state university system will get a $1.1 billion boost, and the city system will get $870 million.

CUNY and SUNY tuition: A hike at most SUNY and CUNY schools will not be included in the budget — at least for in-state students. The budget allows the university systems to hike tuition for out-of-state students in each of the next three years. Hochul had sought the authority to increase tuition across the board.

Tobacco Control: The final budget includes a $1 per pack increase on New York’s cigarette tax, the first such hike in over a decade. The American Cancer Society has projected that increase will save over 15,000 lives.

It does not feature Hochul’s proposal to ban the sale of flavored tobacco products, including menthol cigarettes. That plan was hailed by public health experts, who argue that menthols make smoking more addictive, but it proved too politically fraught to pass. Menthols are preferred by many Black smokers, and the issue split Black leaders.

Medicaid reimbursements: The budget will increase the amount that the state pays to providers who care for Medicaid patients. Reimbursements to hospitals will be boosted by 7.5 percent, and to nursing homes by 6.5 percent.

Mental health: The final budget includes a $1 billion investment in mental health infrastructure, almost all of which would go toward creating 3,500 new beds around the state for long-term patients.

Infrastructure upgrade: In addition to the pot of money created for mental health, the budget injects an additional $1 billion into the Health Care Facility Transformation program, the state’s vehicle for overhauling its health infrastructure. The pool of cash will be split roughly equally between in-person health care providers and telehealth. But all of it will be given out without a competitive bid process or requests for proposals.

Overdose prevention centers: The final budget omitted any funding for overdose prevention centers, a top priority of progressive drug policy advocates. The state’s Opioid Settlement Fund Advisory Board recommended expanding access to more centers, and the Senate broadly supported the Board’s recommendations. Hochul’s administration has maintained that paying for the centers would run afoul of federal law.

Essential Plan: Legislation attached to the budget will seek federal funds to expand the Essential Plan, a state-funded program that provides low-cost health insurance to over one million New Yorkers who are above the income-eligibility level for Medicaid. Currently, households are eligible if they make up to 200 percent of the federal poverty line. The expansion will raise that to 250 percent.

Undocumented New Yorkers will be left out of this expansion. Currently, undocumented people are not eligible for Essential Plan coverage, but last year, Hochul promised to include them in her request for federal cash. She signaled that she planned to break that promise when she announced her budget proposal earlier this year, and the legislature called for her to reverse course and include undocumented immigrants in the request. But they failed to get her to extend coverage to undocumented people in the final budget.

Related: Hochul Ditched Promise of Health Insurance for Undocumented People. She Could Cost New York $500 Million.

Medicaid expansion: The budget delays Medicaid coverage for undocumented immigrants over the age of 64, who were made eligible for the federal insurance program in last year’s budget. The change was supposed to go into effect in January 2023, but this year’s budget pushes it off to 2024, leaving elderly undocumented New Yorkers uninsured for another year.

COLA: The governor and the legislature compromised on how much to hike the pay of nonprofit workers that the state hires to provide health care services to elderly, disabled, and other New Yorkers. Hochul wanted a 2.5 percent hike, and both houses of the legislature countered with 8.5 percent. The final budget includes a four percent boost.

ERAP: The budget will include $391 million for the Emergency Rental Assistance Program, which offers grants to renters who fell behind during the pandemic. That new funding will go primarily to public housing residents and renters with federal Section 8 vouchers, who were left out of previous rounds of rental assistance.

EXCLUDED: None of the other housing proposals that follow made it into the final state budget.

The New York Housing Compact: The highest-profile casualty was the centerpiece of Hochul’s agenda this year — and the most comprehensive proposal to boost New York’s housing supply in decades.

The compact, which Hochul said would enable the building of 800,000 homes in the next decade, relied mostly on two policies: requiring every locality in the state to grow its housing supply by a small percentage every three years, and requiring New York City and its suburbs to allow more housing near most train and subway stations.

Intense opposition from both houses of the legislature — particularly the Assembly — doomed both proposals. The legislature offered no alternatives to mandate new housing. In the wake of the Compact’s failure, Hochul promised to use executive actions to create more housing, but she didn’t offer specifics.

Tenant protections: Some legislators sought to win two measures to protect tenants in exchange for Hochul’s Housing Compact. For the second year in a row, the legislature proposed a $250 million program to offer rent vouchers to New Yorkers who are homeless or at risk of eviction. And both the Senate and Assembly signaled support for elements of a “good cause eviction” law, which would cap yearly rent increases and give tenants the right to renew leases in most apartments statewide, though neither house’s leadership embraced the proposal outright.

After the parties failed to reach a deal on housing, hopes of passing tenant protections in the budget died along with the Housing Compact. Since the voucher program needs funding, it’s likely dead until next year, but tenant advocates are still planning to fight for good cause eviction in the remainder of the legislative session, since it wouldn’t cost the state money.

421-A Extension: Earlier this year, Hochul said she wanted to work with the legislature to craft a replacement for the controversial 421-a tax break, which compensated developers for building large housing developments until it expired last year. Replacing 421-a is a top priority and a heavy lobbying focus of both New York City Mayor Eric Adams and the city’s real estate industry, but legislators showed no interest in it. There’s no replacement in the final budget.

Hochul also sought to extend the deadline for projects that started before 421-a expired. Currently, projects must be completed by 2026 to qualify for the tax break. The legislature rejected Hochul’s request to extend that to 2030.

Higher Taxes and State Funding: Most of the MTA’s budget gap is being filled by state and city grants, a tax hike on New York City businesses, and revenue from planned new casinos.

Over $1 billion in transit funding will come from boosting a transit-specific tax on city businesses. Suburban businesses will be exempt from the hike, despite the fact that the commuter train lines that serve the suburbs receive a higher share of MTA funding per-rider than the city’s buses and subways. The state is contributing $365 million, and the city is kicking in $165 million.

Casinos: Another cash pot will come from gamblers, as the MTA is slated to get nearly half of the tax revenue from new casinos that open in the state. The amount of tax revenue those casinos will generate is highly uncertain, but is expected to be between $400 and $800 million a year.

EXCLUDED

Speed limits: The budget will not include legislation to allow New York City to lower speed limits below 25 miles per hour, despite backing for the measure from Hochul, Mayor Eric Adams, and traffic safety advocates.

Keeping the Corporate Tax Hike: The budget extends New York’s 2021 corporate tax hike through 2027, keeping the tax rate for the state’s top corporations at 7.25 percent.

New Subsidies: With essentially no public opposition from lawmakers, Hochul and the legislature agreed to include a package of new subsidies worth more than $8 billion over the next decade in this year’s budget.

Three industries will see most of the benefit: movies and TV, musical theater, and horse racing.

Over $7 billion of the subsidy package will go to the film industry through the film tax credit. One analysis said the subsidy program costs over $65,000 per job created and has never been shown to have a net economic benefit for New York state.

The budget expands tax credits for Broadway shows by $100 million, to $300 million a year. It extends the Musical Theater Tax Credit program through 2026.

And $455 million will go to renovate the Belmont Park racetrack. Though technically a loan, the New York Racing Association will repay the state using cash that it gets from existing state subsidies, meaning that the public will ultimately foot the bill.

Related: Kathy Hochul Bets Half a Billion on Horse Racing. Will the Industry Pay Her Back?

EXCLUDED 

Individual tax rate: Hochul defeated the legislature’s push to raise taxes on New York’s highest earners this year. Legislators sought to raise about $700 million a year by boosting taxes on New Yorkers making more than $5 million, but Hochul stood firm on her pledge not to raise income taxes.

Start Up New York/EPIC: The final budget doesn’t include Hochul’s proposal to restart  a much-maligned Cuomo-era program to provide tax breaks for new small businesses near college campuses.

Bail: The budget includes eight full pages of markups to New York’s bail law — significantly more than the single clause Hochul announced last week. While doing little to change the letter of the law, the adjustments soften legal language in ways that could alter how judges decide the fate of legally innocent people. According to experts, many will empower judges to set pretrial conditions in ways that weren’t explicitly outlined in the law. The changes encourage judges to use their “discretion” to jail more people pretrial — so they're far less impactful than what Hochul originally proposed, but in line with her stated goals.

Related: Here's What the Budget Would Do About Bail

Prosecution and Defense: The budget will give $87 million in state funds to prosecutors, plus $80 million more for district attorneys’ offices to implement discovery systems. Defense will get $40 million in general state money, plus $40 million more for discovery. The funding split between the two groups has been a major under-the-radar issue in this year’s budget process — particularly because both sides claim they are in urgent need of resources for systems to better implement discovery reform laws passed in 2019.

Assigned Counsel Rates: In an unexpected turn, the budget will dedicate an extra $92 million to cover half of the cost of raises for private attorneys contracted to do public defense work in state court — who, outside of New York City, earn less than half of their federal counterparts. Hochul had inserted legislation into her budget proposal that would have hiked rates but didn’t offer funding for the raise, leaving observers to expect that she’d ask localities to pay for it. The Senate had proposed just $25 million.

Related: Rural Counties See Dramatic Declines in Family Lawyers, Costing Poor Parents their Kids

Police Grants: The final budget will double state funding for the Gun Involved Violence Elimination (GIVE) police grant program to $36 million, after doubling it to $18 million in last year’s state budget. Hochul is a major booster of the program, asserting that it funds “evidence-based” strategies to “focus on the small number of individuals” responsible for “persistent violent crime.” As New York Focus has reported, that mostly means aggressively policing and surveilling crime-dense communities.

The budget also includes an added $1 million to create a police intelligence hub dedicated to the New York City area, a proposal of Hochul’s. The hub will join others like it as part of New York’s regional Crime Analysis Center Network, which works closely with the GIVE program.

Fentanyl Scheduling: Twenty-one fentanyl analogs will be added to the state’s controlled substance schedules, in addition to three other synthetic opioids and a fentanyl precursor. Scheduling the substances will make them illegal to sell or possess without a prescription. Hochul had previously proposed scheduling analogs that were temporarily scheduled by the federal government as well, but the final agreement will only include those that were permanently scheduled.

Excluded

Discovery: Changes to the state’s discovery process did not make it into the final budget after a last-minute upset.

Weeks into budget talks, three New York City district attorneys were able to jostle a policy that neither the governor, the Senate, nor the Assembly had included in their proposals into negotiations. It targeted New York’s 2019 discovery reform law, which repealed New York’s “blindfold” system and created an “automatic” process to compel prosecution to share a wide range of documents related to a criminal case in a timely manner.

The proposal, pushed by Bronx District Attorney Darcel Clark, Manhattan District Attorney Alvin Bragg, and Brooklyn District Attorney Eric Gonzalez, would have created a 35-day deadline for defense lawyers to raise concerns about the discovery the prosecution had shared in a case. The DAs had expressed concerns about the heavy workload associated with discovery obligations, and defense advocates countered that the proposal could give prosecutors a back door to withhold materials.

The governor seemed supportive of the DAs’ plan, and according to legislators who spoke to New York Focus, the Assembly had signed on. But last week, the city DAs suddenly pulled their support. The final budget — which includes $40 million earmarked for New York City prosecutors to implement discovery reform — will pass without rollbacks to the 2019 law.

Clean Slate: The budget does not include the Clean Slate Act, a bill that would automatically seal conviction records for people who have been found guilty of crimes and completed their sentences. After failing to come to an agreement to insert the legislation in last year’s budget, the Senate added the bill — as well as $1 million to implement it — to this year’s proposal, but the Assembly and governor left it out of theirs.

That doesn’t mean that Clean Slate is dead. This year, advocates have taken a dual-pronged approach, pushing both to include it in the budget and pass it as standalone legislation later in the session, which ends on June 8.