New York Gov. Kathy Hochul proposed dramatic spending to help New York City handle a wave of international migrants and to stabilize its reeling public transit system with her $227 billion state budget Wednesday, even as she warned of tougher economic times ahead.
The wide-ranging spending plan also includes a public university tuition hike, a 10% jump in school aid and a proposal to yet again revise state bail law, which is expected to meet resistance from liberal state lawmakers. The proposal kicks off weeks of intense negotiations with state legislative leaders as they try to agree on a finalized budget by the April 1 deadline.
Hochul said caring for new migrants and the solvency of the Metropolitan Transportation Authority, which runs subways and other public transit in the downstate region, are among the most pressing issues facing the state. The MTA has been dealing with lower ridership and revenues since the pandemic.
“The New York City economy drives the state of New York, MTA helps drive the New York City economy. So it’s critically important to all of us,” Hochul said during her budget presentation.
Hochul's MTA package relies in part on increasing a payroll tax on city-area employers to raise $800 million annually. She also wants the authority to receive a share of state money that will come in from up three new casinos planned for the New York City region.
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Hochul called for $1 billion in “extraordinary funding” to provide services and help with migrant resettlement, with the costs divided among the state, city and federal government. Hochul said President Joe Biden assured her there would be federal money to help the city, though she said “he did not give a number.”
Mayor Eric Adams has said that the city has been overwhelmed with new arrivals and has criticized the practice of some governors who transport migrants straight from the border to the city.
“We will continue to need our federal and state partners to do their part, and we look forward to working in partnership with them,” Adams said in a prepared statement that commended his fellow Democrat for committing state resources.
Adams also said the governor's proposal to have the city contribute about $500 million more annually for the MTA “could further strain our already-limited resources.”
The spending plan includes a number of policies announced last month during the Democratic governor's State of the State address, including $1 billion to provide psychiatric beds and services for people with mental illnesses and a plan to spur the creation of 800,000 new homes, in part through changes in zoning rules.
Hochul made the spending proposals even with a possible national recession looming. State tax collections are expected to fall in the coming fiscal year and the administration projected multibillion-dollar, out-year budget gaps.
Acting state budget director Sandra Beattie said a current $8.7 billion surplus will help the state weather an economic downturn.
The budget would raise the state cigarette tax from $4.35 to $5.35 per pack. Washington, D.C., currently has the highest excise tax nationwide at $4.50, according to the Federation of Tax Administrators.
The budget would also prohibit the sale of all flavored tobacco products, as opposed to just flavored vaping products. The administration said the moves will reduce the number of young smokers.
Under Hochul's proposal, state and city colleges could increase tuition annually by either 3% or an amount tied to the Higher Education Price Index, whichever is less. The state’s university centers would have the flexibility to raise tuition 6 percentage points above the system’s base tuition rate each year for the next five years for in-state students.
State Assembly Speaker Carl Heastie said the tuition increase proposal is one that would be “tough” for the conference during budget deliberations.
“We don’t want tuition to be raised on the students. We’re going to have to figure out a way to pay for it,” the Democrat said.
Hochul also wants to make more revisions to the state’s bail law, which was changed in 2019 to do away with pretrial incarceration of people accused of most nonviolent offenses. The law has been tweaked since, but Republicans and some moderate Democrats continue to argue the rules have deprived judges of a tool they could use to hold people who are likely to commit new crimes.
Budget briefing documents say Hochul wants to give judges greater discretion by removing the “least restrictive means” standard to ensure a defendant returns to court, as opposed to considering how dangerous they appear. The governor said the current guidelines are not always clear and that she wants to provide “clarity for the judges.”
State Sen. Jessica Ramos, a Democrat who represents Queens, gave a frosty response to the bail proposal.
“I am not keen on budging on any of the bail reform work that we have done,” Ramos said. “It is incomplete work and I am hoping that the response is to actually build the mental healthcare facilities that we need so New Yorkers who are engaging in harm-doing can actually receive the services and given the treatment that they deserve.”
