BUFFALO, N.Y. — NY Gov. Kathy Hochul has submitted her proposed budget for the coming fiscal year to state lawmakers, who now face an April 1 deadline to approve the spending plan.
The record high budget of $227 billion reflects a 5% increase over the current budget.
Overall, state operating expenses are projected to be $125.2 billion, which reflects an increase of $2.5 billion or 2% from the current year.
The amount of taxes collected by the state will increase to $115 billion, an 11% increase. However, Hochul said there is no plan to raise the income tax on individuals.
The state has a surplus of $8.7 billon, thanks largely to federal bailouts from the Covid 19 pandemic. The budget projects however, the state will back in the red by approximately $6 billion next year, and warns of a economic turndown in the days ahead, echoing other warnings that a recession is likely to occur this year.
Still, Hochul sounded an optimistic note regarding the state's prospects.
“People are starting to feel good about this state,” insisted Hochul, despite data which shows New York among the leading states in outward migration, as residents flee to other parts of the country with more economic and job opportunities, lower costs for housing and energy, and lower tax and regulatory burdens which make them more business friendly.
The budget identifies three of the most pressing fiscal issues for the state as keeping New York City’s transit system solvent, keeping state’s health care system stable, and providing funds for thousands of "asylum seekers" flowing into New York from other countries, and for which the Governor says the state is prepared to provide “extraordinary” funding of up to $1 billion.
Regarding the health care system, Hochul noted during a press conference with reporters that hospitals had their finances crippled during the pandemic when they could not do elective surgeries, which the state itself prohibited.
The budget calls for spending $400 million over the next two years to expand mental health services, provide matching funds (of up to $500 million) over the next two years to increase the endowment for SUNY, $250 million over the next two years in subsidies for moderate income New Yorkers toward their utility bills, and $91 million for the cost of state service providers to implement Hochul’ s plan to tie minimum wage increases to inflation.
Hochul is calling for spending $1 billion to "entirely overhaul" the state mental health system.
The budget calls for $3.1 billion, or a 10% increase in aid to local schools, bringing the total to a record $34 billion. It also calls for spending $125 million to expand full day pre kindergarten.
Hochul mentioned once again the creation of a new office to oversee Micron’s $100 billion investment for a new megafab in Central New York and to lead a broader effort to develop New York’s semiconductor industry, which she unveiled as part of her recent 2023 State of the State.
When doing so, she once again insisted Micron will "create nearly 50,000 jobs" statewide, despite Micron recently announcing that it was cutting it's workforce by 10%, due to the worst industry glut of semiconductors in more than a decade which the company said will make it difficult to return to profitability in 2023.
The state is expected to receive $13.4 billion from the federal government as part of the federal infrastructure bill, about one third of which Hochul proposes to spend on roads and bridges, with another third dedicated to public transit, slightly less than one third dedicated to “clean water, weatherization, and resiliency”, with the rest being spent toward improving broadband and on airports.
The budget also makes note of currently ongoing “transformative infrastructure projects” which total more than $100 billion, funding for which is mostly being provided by the federal government for the projects which are all in New York City.
Smoke ‘em if you can afford ‘em
The budget proposes to increase the state excise tax on cigarettes, already the second highest in the nation, by one dollar to $5.35 per pack.
The 23% increase would make New York’s tax the highest in the country. In addition, the budget includes the legislation to prohibit the sale of flavored tobacco products. The state previously placed a ban on the sale of flavored vaping products, which many smokers had turned to as an alternative to tobacco.
More than a spending plan
As has become custom, the executive budget goes beyond an actual spending plan, and includes many policy issues which are inserted into the budget proposal, and which lawmakers must vote on in order to pass the budget. Hochul said she looked forward to a productive conversation with lawmaker on refining New York's bail reform laws, in order to provide more clarity and discretion for judges.
"Let's insure judges can consider factors for serious offenders and let's leave the law where it is for low level offenses," Hochul said.
An opposite view
In a statement, Rep. Nick Langworthy (R-NY 23) who also serves as New York's Republican party chairman blistered Hochul and called her budget, at first glance, a "complete and unmitigated disaster for hardworking families."
"Hochul’s budget puts all New Yorkers on the hook to pay for President Biden’s failure to fix the border, increases taxes by $1.6 billion on businesses, shifts a billion dollars of Medicaid costs to county taxpayers, and shockingly fails to use all the tools at her disposal as governor to make the changes to our broken criminal justice system that would make New Yorkers safer," said Langworthy. "This budget is merely a continuation of the tax-and-spend policies that are driving New Yorkers from this state in record numbers. Each year the state takes more and more from a dwindling number of taxpayers and redistributes to others in an effort to paper over the broken criminal justice, labor, and energy policies that are destroying the Empire State. Despite all the new taxes and spending in this budget, this baseline budget will only get worse with an out-of-control state legislature that is hell-bent on enacting socialist policies that will bankrupt New York."