Weighing looming deficits, the city’s costly asylum seeker challenge and the loss of pandemic-era federal funds, New York Gov. Kathy Hochul has spent recent weeks preparing a framework for the state’s next budget.
Even after the governor laid out her priorities in a 61-minute State of the State address to the state Legislature last Tuesday, it remains a bit of a mystery what her budget plan might look like.
Among the questions: How much money will the governor reserve for the city’s migrant crisis? The state has pledged about $2 billion for the effort in the current budget cycle.
Hochul, a Buffalo Democrat who is under pressure from her ally Mayor Eric Adams to help New York City, spoke little in her State of the State speech about the estimated 70,000 asylum seekers in city care, saying she would save the subject for her budget proposal.
And the governor laid out few expansive spending proposals outside of a $500 million concept to repurpose state land for housing.
Still, the centrist Hochul has dropped some hints about the budget, which may be slimmer than city progressives would favor but pricier than conservative fiscal hawks would support.
“We don’t have all the resources to give everyone what they want in this budget,” Hochul bluntly told reporters in the Bronx on Thursday. “I’ve said we’re going to operate within our means. I’m not raising income taxes.”
The scale of the budget could be a sticking point with the Legislature, which tends to lean to Hochul’s left. Last year, Hochul proposed a $227 billion spending plan; the price tag creeped up to $229 billion after negotiations with lawmakers.
This year, Hochul has not presented any controversial nonfiscal proposals that might cause the Legislature to balk. Last year, she successfully used the budget to push through contentious tweaks to bail reforms and unsuccessfully sought to use it to pass an ambitious but polarizing housing plan.
Ten months from a major election, Hochul does not seem hungry to invite bruising intra-party budget battles. Democratic critiques of Hochul’s State of the State speech were rare and generally limited to the party’s left flank.
State Sen. Michael Gianaris, the deputy majority leader, offered a dose of Democratic criticism after the address, telling reporters in Albany that the governor’s housing proposals were too developer-friendly. But he declined to stir the pot any further in a brief phone call Thursday.
“The budget is always where the details get revealed,” said Gianaris, a Queens Democrat and member of the progressive Working Families Party.
In a Tuesday statement, the Working Families Party’s directors said state leaders “must have the courage to raise taxes on corporations and the ultra-rich and invest in affordable housing, child care, public education, and climate protections.”
The left-leaning Fiscal Policy Institute, an Albany-based nonprofit research group, has said that the projected $4.3 billion budget deficit for the next fiscal year is not an unusually large hole by historic standards.
“We’re concerned about unnecessary spending restraint in the budget,” said Nathan Gusdorf, director of the Fiscal Policy Institute, adding that unnecessary austerity can “really inflict economic harm on the statewide economy for working New Yorkers.”
Republicans, meanwhile, have already begun to warn that a bloated budget is on the way.
State Sen. Thomas O’Mara, a Chemung County Republican and the ranking member of the Finance Committee, said by phone Friday that Albany’s ruling Democrats have embarked upon “excessive spending” that has gotten “out of control” in recent years.
“It’s not sustainable,” he said. “We’ve got to look at cutting the budget everywhere.”
O’Mara said a proposal by Hochul to spend $150 million on new pools across the state struck him as an unnecessary expenditure. “It boggles the mind that in the fiscal situation the state is in that we could look at items like that,” he said.
The GOP, seeking to score political points in swing suburban and upstate areas, may especially home in on any spending provisions targeted at assisting the city with the migrant crisis. Hochul said in August that she expected to include at least $1 billion for the crisis in the 2025 fiscal year budget.
Adams, who attended Hochul’s State of the State speech, told reporters in Albany on Tuesday that he was not troubled that the governor had avoided addressing the migrant challenge.
His administration has projected that it may spend $12 billion supporting the migrants by 2025, and has implemented budget cuts to some city services. The mayor has not said how much money he wants from Albany in the next state budget.
“I don’t want to get ahead of ourselves,” Adams said last week, adding that his budget office was in talks with Hochul’s budget office. “I’m going to let them do their thing while I do my thing.”
In an unusual twist, he also plans to roll out the city’s budget proposal on Tuesday, around the same time that Hochul lays out her plan.