Governor Kathy Hochul’s budget was a study in contrasts, as the state rolled back landmark criminal justice reforms, left climate targets unfunded, and agreed to an over $1 billion subsidy for a football team, but also made large investments in child care, public higher education, rent relief, and health coverage for undocumented immigrants.
Billions in one-time federal aid and higher-than-expected tax revenues enabled the state to make these expenditures—and still stash billions of dollars in state reserves.
Most of Hochul’s top priorities in her January budget proposal were included in the budget passed last week, though there were a few notable exceptions, such as the removal of the 421-a real estate developer tax break. But in large part, Hochul was able to mollify the legislature’s opposition to some of her measures by offering a big carrot: $4 billion in additional spending for the legislature to use for its own priorities that didn’t get space in Hochul’s initial budget proposal.
- Total Spending ($220 billion)
- At $220 billion, the budget is New York’s largest ever, breaking last year’s record of $212 billion. (Though adjusted for inflation, last year’s budget was larger.)
- Reserve Savings ($5 billion)
- The final budget preserve’s Hochul’s proposal to increase New York’s reserves to 15% of the state’s operating funds by 2025, through a $5 billion deposit to the state’s reserve funds this year, and another $5.3 billion over the two following years. Instead of Hochul’s deposit, the legislature had proposed a $180 million withdrawal this year. It is not yet clear which fund the reserve cash is going to; fiscal watchdogs had expressed alarm that Hochul had proposed directing the majority of savings to a fund without restrictions on how the governor can spend it.
- Middle-Income Tax Relief ($162 million)
- The budget implemented several tax cuts, including speeding up the time frame on income tax cuts for middle-class New Yorkers. The cuts began in 2018, and were scheduled to continue through 2025. The budget implements all the remaining cuts in 2023, at an estimated cost of $162 million for the state over the next fiscal year.
The housing measures in the budget will bring some relief to distressed tenants and landlords, with hundreds of millions of dollars going to paying off rental arrears. A controversial real estate developer tax break was also discontinued. But measures to combat homelessness were left on the cutting room floor.
- Rent Relief ($800 million)
- The budget allocates $800 million in relief funds for residential tenants behind on their rent. The Senate and Assembly had both proposed at least $1 billion in relief after two rounds of requests for federal aid netted New York only $119 million.
- NYCHA Funding ($1.1 billion)
- The budget includes a total of $1.1 billion for the New York City Housing Authority — $350 million in new funding for infrastructure improvements, plus $750 million in reappropriations from previous budgets. Hochul’s budget proposal had called for spending just the $750 million in reappropriations, while both the Senate and Assembly had asked for an additional $500 million, for a total of $1.25 billion.
- Hotel Conversions ($100 million)
- The budget allocated $100 million to the Housing Our Neighbors with Dignity Act, a bill aimed at funding nonprofit conversions of hotels or commercial properties into affordable housing. Some supporters of the bill celebrated its passage, but worried that the strictures of building and zoning regulations, especially in New York City, could hamper successful conversions.
- Not Included: Housing Access Voucher Program (HAVP)
- The Senate and Assembly both proposed spending $250 million to create a program of housing vouchers for households that are homeless or at risk of eviction. In negotiations, the Hochul administration said that the program would cost far more—$6 billion, a figure it declined to explain—and opposed its creation. It was not funded in the final budget.
- Not Included: 421a/485w Real Estate Tax Breaks
- The 421-a tax break is meant to incentivize developers to provide affordable housing, but affordable housing advocates charge that it is effectively a giveaway to real estate developers. It’s on track to expire this year, and Hochul sought to extend it in slightly modified form under a new name, 485-w. In a defeat for the governor, the legislature tossed the extension out of the budget, and her efforts to get it put back in were unsuccessful. It could still be enacted later in the legislative session.
- Not Included: Good Cause Eviction
- As expected, Good Cause eviction tenant protections were not included in the budget. Tenant advocates and progressive legislators have planned a major push for the legislation in the remainder of the legislative session.
New York’s immigrants and their advocates had few wins to celebrate this budget cycle. An intense campaign to extend health coverage to low- and middle-income undocumented New Yorkers came up short, winning less than a third of the sought-after funds. And an effort to secure additional cash for the Excluded Workers Fund after it ran dry last fall failed entirely.
- Coverage For All ($100 million)
- The budget will include $100 million to extend a state health insurance plan to undocumented immigrants over 65 years old, and to undocumented mothers who have given birth within the past year. The legislature had proposed a $345 million expenditure to extend the state plan to all undocumented New Yorkers, but Hochul opposed the measure, citing a nebulous cost estimate of $1.9 billion. She said that New York will apply for a federal waiver to extend coverage to undocumented immigrants under 65.
- Not Included: Excluded Workers Fund (EWF)
- Last year, the state created a first-in-the-nation cash relief program for New Yorkers, primarily undocumented immigrants, left out of federal and state relief programs. The $2.1 billion fund quickly ran out of cash, and advocates had pushed to refill it. That effort was unsuccessful.
Criminal justice issues were at the center of this year’s budget negotiations — so much so that we wrote a whole article on where they landed.
The final budget included rollbacks of New York’s landmark 2019 bail reforms, changes to its discovery laws, and expansions of pre-arraignment detention and involuntary inpatient mental health treatment. Still, the changes were far less sweeping than Hochul’s had proposed, and reform critics like Mayor Eric Adams offered only tepid support.
On other criminal justice issues, an expansion of the funding and scope of police surveillance and a measure to ease the difficult process of obtaining an ID after leaving incarceration were included in the budget. Not included in the final budget were proposals to legalize private prison labor, make phone calls from prison free, give the state Department of Health greater oversight over prison healthcare, increase funding for family court lawyers serving indigent clients, and bar landlords from discriminating against renters with criminal records in some cases, despite each being included in some of the three budget proposals.
Health care and education saw significant compromises between the legislature and Hochul. The legislature gave ground on some of its more aggressive plans for raising health care worker wages, establishing universal child care, and dramatically boosting funding to higher education. But many of the policies in the enacted budget were more aggressive than those that Hochul proposed in January.
- Mayoral Control
- Hochul and Mayor Eric Adams had proposed extending Adams’ control over New York City schools for another four years. The legislature did not include this measure in its budget outlines, and successfully kept it out of the final budget. It could still be passed into law before the legislative session ends in June.
- Public Higher Education ($3 billion in additional funding)
- Beyond the state’s standard support of the State and City University of New York systems, the budget included over $3 billion in additional funding. These appropriations will mostly go to improvements to the physical infrastructure of the two systems, but will also provide funding for hiring additional faculty, expanding faculty benefits, and additional student services and tuition subsidies. Sen. Andrew Gounardes, a major proponent of CUNY funding, said that the budget “ends a decade-long trend of disinvestment,” but added that he would continue to push for the nearly $1.5 billion in funding envisioned by the New Deal for CUNY coalition.
- Child Care ($7 billion over four years)
- The budget includes $7 billion over the next four years in economic support for child care centers and tuition subsidies for low- and moderate-income families. In August, eligibility for state-funded tuition subsidies will be extended from 200% of the federal poverty level to 300%, or about $83,000 for a family of four. But in a rebuke to immigrant advocates, who were rebuffed on many of their biggest asks this year, undocumented children will continue to be ineligible for the subsidies.
- Home Health Care Wages ($7.4 billion)
- Nearly $7.4 billion will be allocated to a $3-an-hour boost to the wages of home health care workers. They will receive a $2-per-hour raise this October, and an additional $1-per-hour raise next year. Home care advocates, who had been pushing for a wage increase up to 150% of the local minimum wage—and persuaded the legislature to include that raise in its budget proposals—blasted the increases as insufficient, though the president of healthcare workers union 1199SEIU praised it.
- Health Care Worker Bonuses ($1.2 billion)
- $1.2 billion was allocated for frontline healthcare worker bonuses ranging from $500 to $3,000, meant to attract workers to the state’s health care sector, and retain existing workers. The budget specifies that the bonuses are not counted as income for the purposes of eligibility for public benefits, a move meant to allay the concerns of some advocates who worried that the increased income could make healthcare workers ineligible for programs such as food stamps.
Like last year's, the budget did not allocate the funding experts say would be necessary — on the order of $15 billion a year — to meet New York’s climate goals.
- Environmental Bond Act ($4.2 billion)
- The final budget will include a proposal for a $4.2 billion bond issue to fund climate change adaptation projects such as building flood barriers and increasing state buildings’ energy efficiency, as well as some programs to reduce carbon emissions. The bond issue must be approved by voters in November to go into effect. In her executive budget, Hochul had proposed increasing the bond issue from a previously planned $3 billion to $4 billion. Both houses of the legislature had proposed even bigger expansions — the Assembly to $5 billion and the Senate to $6 billion.
- Utility Debt Relief ($250 million)
- The final budget will include $250 million to help New Yorkers pay off utility arrears. About 1.4 million New Yorkers owe nearly $1.8 billion in utility debt, numbers that have ballooned during the pandemic.
- Housing Electrification ($34 million)
- Hochul has set a goal of having one million homes in New York use electric heating, rather than fossil fuels, by 2030. The budget allocated $34 million towards this goal, far short of the $1 billion per year that New York’s Climate Action Council estimates is required.
- Not Included: Regional Greenhouse Gas Initiative (RGGI) Raid
- Hochul’s budget outline proposed diverting about an eighth of the $160 million Regional Greenhouse Gas Initiative fund — the state’s only cash pool dedicated solely to green energy — into the general treasury. Both the Senate and the Assembly rejected this proposal in their budget outlines, and it was not included in the final budget.
- Not Included: Gas Ban in New Construction
- Both Hochul and the Senate proposed a measure banning the use of fossil fuel heating systems in new construction, with the Senate’s version moving at a faster timeline mirroring the gas ban New York City passed last year. But faced with Assembly leadership’s opposition to including major policy items in the budget, the measure was dropped from the final deal. Proponents of the ban said they hoped to get it done as a law before the legislative session ends in June.
- Not Included: Recycling Regulation
- In her proposed budget, Hochul included a measure meant to require companies to cover the cost of recycling their products. But green groups criticized the proposal, for being seeing it as too deferential to industry. The proposal was removed from the final budget, and advocates now plan to focus on passing a stronger version of the rule as a freestanding piece of legislation.
- Public Campaign Financing ($10.5 million)
- In 2024, New York State will kick off a system for offering public funds to candidates running for statewide office and the state legislature. The system, modeled on New York City’s public campaign finance apparatus, is intended to reduce the influence of big money in politics and make it easier for candidates who are not independently wealthy to run for office. Hochul’s and the Assembly’s budget proposals allotted $10.5 million to the Public Campaign Finance Board. The Senate sought to up this figure to $40 million, a move that was cheered by good-government groups such as the Brennan Center for Justice, but the final amount remained at $10.5 million.
- Buffalo Bills Stadium ($600 million)
- The budget includes $600 million of state funds towards the construction of a new football stadium for the Buffalo Bills. The state’s contribution, plus a $250 million contribution from Erie County and further state funds to be disbursed over the life of the stadium, add up to over $1.1 billion, the largest ever public subsidy for construction of a football stadium.
- Downstate Casinos
- The budget included authorizations for three casinos to open in the New York City area—the region’s first full-fledged gambling establishments. The precise location of the casinos may be contentious, as some politicians welcome the jobs and economic activity that casino owners promise, and others view them as wealth drains on local communities.
- JCOPE Replacement
- The Joint Commission on Public Ethics, the state’s much-maligned ethics agency, will be replaced by a new body known as the Commission on Ethics and Lobbying in Government. Some of the most criticized elements of JCOPE, such as minorities of members having veto power, will be discontinued in the new commission. But most of the state’s major good government groups issued a statement calling the new body “fatally flawed” given that its members will still be appointed by the politicians they are meant to police.
Check back for updates as we continue to analyze the budget. This article has been updated to reflect that HONDA received $100 million of funding in the budget and that NYCHA received a total of $1.1 billion in funding.