In the coming weeks, New York’s lawmakers will pass a budget that determines how the state will spend over $230 billion in public money. It’s a massive sum, bigger than most countries’ budgets, and outpacing every other state except California.
At stake are key questions for New York’s future. Will the state invest in treatment centers for people struggling with opioid addiction? Will it stop subsidizing the expansion of fossil fuel–based heating systems? With a declining incarcerated population, how many prisons can the state close?
When the houses of the state legislature introduce their budget proposals this week, negotiations over these issues — and many more — will kick off in earnest.
JUMP TO QUESTIONS
What is the state budget?
Where does the money come from?
What are the major steps in the budget process?
Who are the key players?
How does our process compare to other states?
Is the entire budget up for negotiation?
How does the public get involved?
Reader-submitted questions
In the coming weeks, New York Focus reporters will continue to closely cover the secretive process through which the state’s enormous, far-reaching budget is made. We’ll be analyzing dueling priorities, providing updates on the progress of negotiations, and explaining what it all means for New Yorkers across the state. First, we wanted to give readers a refresher — or introduction — to how the budget process works and why it matters, and to answer some questions from our newsletter subscribers. Buckle in!
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The budget is the state’s plan for how it will spend its money over the next year. It comprises thousands of pages of dense legal language spanning subjects from housing to transit. This year’s budget will likely allocate over $230 billion, with the biggest shares going to healthcare and education.
Despite its name, the budget isn’t limited to financial decisions; it’s also frequently used to enact laws that don’t involve spending money. Last year’s budget made it easier for judges to set bail and allowed more charter schools to open, for example, and this year, Governor Kathy Hochul’s budget proposal includes measures to make it easier to build housing in New York City and speed up the process for getting a liquor license.
Most of the money spent in the budget comes from the taxes that New Yorkers pay to the state government. But a sizable portion is cash that the federal government gives New York to provide services ranging from highways and transit to health insurance for low-income residents. Hochul’s proposal this year included $129 billion in state funds, $85 billion in federal funds, and another $19 billion in mixed state and federal funds for construction and renovation projects, totaling $233 billion.
Here’s the basic outline:
In the first few weeks of the year, the governor issues the “executive budget,” a comprehensive proposal for how the state should spend its funds.
A couple of months later, generally in early to mid-March, each house of the legislature responds with its own proposal, known as the “one-house budgets.”
The three parties enter into weeks of intense negotiations to resolve the differences. They’re supposed to come to an agreement by April 1, which is the start of the state’s fiscal year, but the process can drag on for days or even weeks past the deadline.
When the parties reach a deal, the legislature votes to approve the final budget, which goes to the governor to be signed into law. Everyone takes a deep breath and starts getting ready to do it again the next year.
Although the process is a three-way negotiation, the governor has the upper hand. The executive budget sets the framework for all subsequent discussion, and if legislators try to add additional spending items to the governor’s proposal, the governor can veto each item individually. That doesn’t generally happen, but the threat of a veto can enable the governor to rein in legislators’ desire to spend more.
When the Senate and Assembly issue their response budget proposals in March — also known as the “one-house” budgets — they’re more opening offers for negotiation than actual plans. No one expects that everything in the one-houses will be put into law. But once all three proposals are out, the subjects for debate are clear.
Three key parties dominate the process: the governor, the Senate majority leader, and the Assembly speaker. (They have historically been called the “three men in a room” — though two of them are now women.) Along with their senior advisors and staff, they conduct negotiations behind closed doors. Some key legislators also have significant influence, especially if they chair key committees or are longtime members who have built up influence over the years.
Most legislators play a limited role. Their main tools to advance their priorities are to pressure legislative leadership and to use public attention. Republicans generally aren’t included in negotiations. Democrats are kept more in the loop: Each house regularly holds “conferences” where legislative leaders and their staff share updates and get feedback from rank-and-file members as they work toward a deal.
New York’s budget process is notoriously opaque. In a 2015 analysis by the Center for Public Integrity, New York ranked dead last among all states for accountability and transparency in its budget process. Not much has changed since then, and good government groups still lament the lack of avenues for citizens to have meaningful input or even follow along.
Perhaps the most glaring example of the lack of transparency is how the legislature actually votes on the budget. The mammoth bills are often introduced just hours before the legislature approves them, offering almost no time for lawmakers — let alone the public — to process and react to the final agreements. Voting often doesn’t finish until the middle of the night, when few New Yorkers are watching.
This isn’t how things are supposed to work. Under the state constitution, bills must be introduced three days before a vote happens, to leave time for public debate. But the governor can lift this requirement by issuing a “message of necessity,” allowing the bills to go to a vote immediately. These messages of necessity have become an Albany tradition, to the chagrin of good government watchdogs.
Although negotiations over the budget get fierce, not everything is up for debate. In fact, most of the negotiations revolve around just a few billion dollars out of the hundreds that the state will spend. Last year, for example, Hochul initially proposed $227 billion in spending, and the state Assembly countered with $233 billion. It still took a month beyond the April 1 deadline for the two sides to work out their differences, and when the dust settled, they’d agreed on $229 billion.
Significant parts of the budget are more or less on autopilot. State agencies, like the Department of Health or State University of New York, need to be funded every year at roughly the same levels. Medicaid and public education are always the two biggest line items, and don’t generally fluctuate dramatically in cost. Still, significant debate can occur even when it comes to required spending areas. Hochul’s plan to cut aid for public schools by nearly half a billion dollars is set to be one of the most contentious parts of negotiations this year, for example. And the governor and legislature are pushing in opposite directions on Medicaid spending, with Hochul looking to save over $1 billion by giving home care workers a pay cut, among other measures, and most Democratic lawmakers backing a plan to fully fund hospitals’ Medicaid costs by tapping state reserves.
Beyond these required categories of spending, many items in the budget are “optional,” and can be slashed as a wide variety of programs compete for limited funds. Animal shelter funding might see a cut one year, or lawmakers might agree to fund a free bus program, among hundreds of options.
The budget process is always accompanied by a flurry of lobbying, activism, and advocacy. White-shoe lobbyists lean on lawmakers on behalf of major corporations and industry groups. Advocacy groups hold rallies around the state and in Albany; a favorite spot within the state capitol is the “Million Dollar Staircase,” an enormous and ornate late-19th century structure that got its name thanks to its exorbitant construction cost. The public’s advocacy also frequently includes civil disobedience, with activists getting arrested outside the governor’s office or at other key locations.
Another opening for public input is the legislature’s series of budget hearings. Early each year, the legislature’s committees hold marathon hearings on most major topics covered by the budget, such as taxes, housing, and education. Any New Yorker can submit written testimony, and the committees select who will be invited to testify in person.
A reader from Ulster County asked: Why does the bottle bill fail every year?
First, some context: Under a longstanding state law meant to incentivize recycling, New Yorkers pay a five-cent “deposit” when they buy certain canned or bottled drinks. If you return the bottle, you get the deposit back (and the store or redemption center gets a 3.5-cent “handling fee” for processing the return).
The deposit amount hasn’t budged since the program was set up 40 years ago. Back then, 5 cents were worth a lot more — about 15 cents in today’s dollars. The handling fee hasn’t been increased for 15 years, either. That means that the incentive to recycle has steadily weakened over time.
For years, lawmakers have introduced a bill to double the deposit, increase the handling fee, and expand the law to cover more beverages. It polls fairly well. Environmental groups, pointing to New York’s overflowing landfills, strongly support it. So do redemption centers, suffering from a wave of closures.
Now, your question. Why does it fail every year? The expanded bill has faced widespread industry opposition: Restaurants and other retailers say they don’t have the space to store returned bottles, and beverage distributors, on the hook for the handling fees, warn that they’ll pass on the increased cost to consumers.
Perhaps as a result, neither Governor Andrew Cuomo nor Governor Kathy Hochul have backed it, and the legislature hasn’t prioritized it. (In 2019, Cuomo backed an expansion of what beverages were covered, but not the size of the deposit, but his proposal failed.) The bill would likely have to pass through the state budget process, over which New York Focus readers know the governor exerts substantial control.
But there are signs the bill is gaining momentum. Last year, the Senate included it in its budget proposal. In January, more than 300 business, environmental, and civic groups asked Hochul to include it in her executive budget. (She didn’t.)
Asked whether the legislature would include the bill in their “one-house” budget proposals, New York Public Interest Research Group executive director Blair Horner said, “Hard to say, but we’re trying!”
—New York Focus Climate Reporter Julia Rock
A reader from Queens asks: Are labor contracts included in this budget?
No, labor contracts are not typically a topic of negotiation in the state budget. Collective bargaining for New York’s 14 public-sector contracts usually happens outside the budget cycle. For instance, one of the state’s largest public-sector unions, the Public Employees Federation (PEF), voted last July to ratify a three-year contract — several months after the legislature passed its unusually overdue budget. That said, unions generally try to sync negotiations up to a time when the legislature is in session to make the process easier, because there is a legislative process that kicks in after contract negotiations. Once the deals are signed, the legislature must pass a so-called “pay bill” to allocate any additional funding in the agreement.
—New York Focus contributor Max Parrott
A reader from Groton asked: I would like to know the extent to which the 2024 budget reflects the proposals of the higher education unions (UUP and PSC, backed by NYSUT) for funding SUNY and CUNY more fully.
New York’s higher ed unions are most certainly asking for more money.
Governor Hochul’s executive budget proposes to increase the operating budget for SUNY campuses by $54 million and CUNY by $36 million, while keeping the number of full-time faculty in both systems flat. In both cases, staff unions say the resources fall short of what they need.
The PSC, the CUNY staff union, is demanding an additional $1.29 billion on top of the $5.8 billion total the governor has proposed — most of which would go toward its proposal of making the first 60 college credits free for students and hiring enough new full-time faculty to maintain a 15-to-one professor-student ratio. The PSC has also argued to raise the annual floor for community college funding.
The UUP, the SUNY staff union, is asking for an additional $139 million in direct campus funding and $110 million in operational funding on top of the $13.3 billion that the governor has proposed. As part of its budget response, UUP president Fred Kowal has also rebuked SUNY’s controversial plan to close the teaching hospital at SUNY Downstate Health Sciences University in Brooklyn.
—New York Focus contributor Max Parrott
A reader from Livingston County asked: I heard a lot in the governor’s State of the State about her tough-on-crime stances, funding for district attorneys’ offices, and increasing access to mental health services. Will her budget include funds to our prisons and jails for mental health treatment and re-entry programming?
The governor has indeed proposed ramping up funding for police and prosecutors — as she has during every budget cycle since she entered office — particularly to combat gun violence. This year, she wants to keep gun policing spending levels up, while also beefing up enforcement of retail theft and domestic violence. As we’ve reported, her retail theft plan mirrors her gun plans: more street policing, more surveillance, more prosecutors, tougher penalties.
Both in this year’s budget proposal and her last two, Hochul has focused a lot on re-entry, or helping people move from incarceration back into broader society. Much of that relies on surveillance: Half of the $6 million she wants to add to the state’s efforts to “support re-entry and reduce recidivism” this year would go toward gathering intelligence and data on parolees. But she also wants to add $2 million to transitional housing programs for recently released people and expand the prison system’s college programming.
And yes, Hochul has proposed a kitchen-sink initiative to combat what she calls “the mental health crisis,” including expanding services to people charged with crimes. But there appears to be nothing in it that addresses the lack of adequate mental health treatment in prisons. The state prison system often touts its vast array of specialized mental health facilities, but by all accounts, the care is abysmal: One of the most common complaints I hear from incarcerated people and their loved ones is that people suffering from mental health crises are subjected to brutality and neglect.
Take the recent case of Alex Mirzaoff. He was sent to prison specifically to get mental health treatment, but his condition only worsened there — to the point where he couldn’t gather himself enough to play a card game with his parents when they visited.
Even though Hochul hasn’t promised better services in prisons and jails, we’re interested in what else she has in store for mental health. Keep an eye on our budget coverage as we unpack her sweeping, multi-pronged plan.
—Chris Gelardi, New York Focus criminal justice reporter
