The state budget framework announced Monday gives Gov. Kathy Hochul wins on many of her most urgent priorities, achieved in part by agreeing to legislators’ demands to spend billions more in the coming year.
Most prominent among Hochul’s successes are a housing compromise that could jumpstart construction in the city, measures to close illegal cannabis shops, dealing with the surge in retail theft and resisting calls from progressive legislators to raise taxes on the wealthy.
The budget will also be a major victory for Mayor Eric Adams, who needed the housing deal to have any chance of accelerating building in the city, $2.4 billion to help pay for the costs of asylum seekers and a possible two-year extension of mayoral control of the schools without a showdown over the issue during the rest of the legislative session.
The Adams administration was ecstatic over the housing plan.
“If this framework holds, New Yorkers can breathe a sigh of relief,” said deputy mayor Maria Torres-Springer in a statement. “Pairing new tools to build housing with tenant protections will help our city build its way out of the housing crisis and keep people in their homes.”
It isn’t clear if there are details yet to be worked out between the governor and Senate Majority Leader Stewart-Cousins (D-Westchester) and Assembly Speaker Carl Heastie (D-The Bronx) or if they are delaying releasing the details while legislators are briefed.
But the budget for the 2025 fiscal year that began April 1 is expected to total $237 billion, or about $5 billion more than Hochul originally proposed. The added spending is possible because tax revenues have continued to exceed projections, with about $3 billion in extra money from the fiscal year that ended March 30 and revised estimates for the current year.
The extra money is going primarily into the state’s Medicaid program, with some additional funds for education.
In agreeing to the additional funds, the governor gave up on two of her priorities: Restraining fast-growing Medicaid spending, especially for home health care, and restructuring education aid to reduce funds for schools with declining enrollments and increase them for those that are growing.
Fiscal monitors criticized the increases and deplored the lack of detail in Monday’s announcement.
“We are two weeks late, we have a reported budget without financial details, we have used extra money to increase unaffordable spending and we could face a $16 billion-plus budget deficit in fiscal year 2027,” said Andrew Rein, president of the business-backed Citizens Budget Commission.
His estimate of future budget deficits is merely a guess because no one has disclosed the financial assumptions being used.
“The guts of the budget is a table of numbers, that’s what they should produce and what the legislature should have before they vote,” he added.
While there are no new taxes in the budget, the issue is likely to continue to be a matter of controversy in Albany, with higher personal income tax rates on the wealthy and corporations that produce almost $3 billion expiring in two years.
On cannabis, the legislature agreed to give state officials the power to immediately shut down stores selling marijuana products illegally and more importantly allow local governments to take over that responsibility if they want. State officials are unlikely to have the manpower to be able to stamp out such stores.
Despite the reluctance of Assembly Democrats, she won tougher penalties for retail theft, more money for state police efforts to deter those crimes and some means to subsidize anti-theft measures by businesses.
And despite Heastie and Stewart-Cousins saying that the matter of mayoral control of schools should be left for later in the session, the governor is believed to have added to the budget a two-year extension, although that decision may not be final.