Gov. Kathy Hochul is scheduled to unveil her most expensive budget on Tuesday, with a $252 billion plan to continue increasing spending to fund new benefits.
Mr. Hochul's administration proposal is $19 billion (8.3%) larger than last year's proposal and $36 billion (16%) more than the original plan for 2022. The state budget for 2024-25 is expected to be $240 billion at the end of the year. The third quarter of last year.
New benefits and tax cuts, along with continued increases in tuition assistance and Medicaid, are fueling budget expansion.
“The big two are still going to be Medicaid and school aid,” said Blake Washington, Hochul's budget director.
“A number of other state agencies are also seeing modest increases throughout the program,” Washington told the Post. “We’re seeing a huge increase in higher education this year.”
As expected, Mr. Hochul did not include a proposal to close the $33 billion revenue gap in the MTA's proposed $68 billion five-year capital plan. Washington and legislative leaders acknowledge those talks will almost certainly include new taxes and fees, but Hochul's budget does not include any proposals to close the gap.
State budgets must be balanced before enactment, but governors have presided over structural deficits that are regularly deferred to future fiscal years. Hochul has a $27.3 billion deficit through the next three fiscal years, up from a total deficit of $14.3 billion entering this fiscal cycle.
According to the proposal, Hochul's widely touted “affordability” policies, such as middle-class tax cuts and child tax credits, would be phased in over two years.
Families with children under 4 would receive a $1,000 credit per child in 2025, and a $500 credit for children ages 4 to 16 in 2026. The credit expansion is expected to cost $800 million over two fiscal years.
The Hochul middle-class tax cut applies to single filers with incomes of less than $215,400 and married filers with incomes of less than $323,200. Tax rates will be reduced by 0.1% in 2025 and 0.2% in 2026.
The budget proposal includes a $3 billion proposal to send $300 checks to single New Yorkers with incomes of $150,000 or less and $500 checks to households with incomes of $300,000 or less.
The spending plan also includes new details about policies restricting children's cell phone use in schools.
School districts across the state will be required to adopt “bell-to-bell no-phone policies” to keep children away from devices during class. This includes exemptions for students with medical needs such as insulin monitoring.
Washington state said the state has set aside $13 million to help schools implement the ban, but the proposal is designed to leave details up to each school district.
“Whatever it is, we want to make sure the district engages parents and students and comes up with something that everyone can live with,” Washington said.
New York state's powerful teachers unions over the governor's plan to overhaul the state's school funding system to eliminate provisions called “harmless savings,” which keep schools shrinking from losing state funding. In the wake of the clashes, they have sided with Hochul and are pushing for a ban on cell phones.
Eliminating “harmless savings” would have meant cutting funding for nearly half of the state's schools, but Hochul abandoned the overhaul during last year's budget negotiations and instead proposed a The Rockefeller Institute has signed a $1 million contract to study changes to the method. The day after the report was released, the governor reversed his position on “harmless preservation.”
The governor is still calling for less drastic changes to the school aid system, including using the most recent census numbers instead of the number of students eligible for free or reduced-price lunch. This includes using data on poverty levels and economically disadvantaged communities.
However, these changes will not lead to savings in the school aid budget, which is the largest part of the spending plan. The plan would increase school aid by $1.7 billion to $37.4 billion.
The governor also wants New York City to cut spending to help migrant arrivals, with no additional spending proposed on top of the $4.3 billion the state already devotes to the crisis.
As of December, only about a third of the state's $1.4 billion in cash earmarked for immigration had been spent. According to the state comptroller's office. New York City has been months behind in filing refunds with the state. The latest figures show the number of migrant arrivals has fallen to about 700 per week, with a total of 108,600 migrants under the city's supervision.
Last year, Hochul State budgeted $500 million to spend on immigration issues using the reserve fund, but Tuesday's proposal includes adding 10% to the state's rainy day “lockbox” for the reserve fund. It also includes a $1 billion transfer.
The budget is not expected to include money to help NYPD officers “flood” subways, as Hochul said last week. His office quickly retracted his public comments announcing a plan to make clear that $154 million in New York City police overtime costs would be taken out of this year's budget and split 50-50 between the state and the city.
Hochul's proposal is expected to receive counterproposals from each chamber of the state Legislature later this spring. The legal deadline for the governor and Legislature to come up with a final plan is April 1, but Albany often misses that date.
