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The state budget debate wraps up this week

This week, Albany may well finalize a deal on the state’s upcoming budget, an agreement that is supposed to be in place by April 1. The final budget will clock in at some $216 billion – the largest in state history. This year’s budget negotiations have been one of, if not the most, secretive in memory. The information black-out makes it essentially impossible for even the most astute Capitol-watcher to know how the budget deal will play out.

Here are some of the ways to see how the new budget will impact New Yorkers.

  • How much money will the state spend?  Given the enormous infusion of funds from the federal government and state tax revenues that have exceeded expectations, budget forecasters have predicted massive surpluses for the upcoming state budget fiscal year.  Governor Hochul has proposed to set aside 15% of the state’s record surpluses as part of her $216 billion budget plan.  Her spending plan advanced a projected balanced budget for each of the next five years and added over $5 billion to total cash reserves, bringing them to $8.9 billion.  The Senate and Assembly plans would spend billions more than the governor.  We’ll know soon how much of the governor’s proposed “rainy day funds” make it into the final agreement.
  • Will the budget give the governor and the legislative leaders a blank check?  The governor’s proposed budget gives her broad and unilateral spending and borrowing authority that are unnecessary, especially given the progress made in pandemic response.  Outside experts put that spending – much of which is also outside the scope of the state Comptroller to review – in the billions of dollars.  The Senate has rejected much of this unfettered spending and itemized it in its plan.  Will the final agreement do the same?
  • What programs will any additional spending be targeting?  Governor Hochul’s executive budget was widely viewed as the most generous advanced by any governor in many years.  Yet, advocates argue that the limits on spending applied during the Cuomo Administration starved needy programs and more spending is necessary to address the damage.  For example, while the governor’s higher education budget helped balance this year’s college costs and expand students’ financial assistance, advocates argue that many colleges are teetering on the financial brink and the governor’s budget doesn’t provide the necessary lifeline. 
  • What will the state do to address the costs of climate change?  Last year, the state agreed to place on this November’s ballot a vote on whether the state should borrow $3 billion to help offset the state’s costs resulting from climate change, as well as other environmental needs.  Governor Hochul’s budget bumped that number to $4 billion.  The state Assembly has gone one step further and advanced a $5 billion bond act.  The Senate has topped them all with a $6 billion plan.  Whatever the final number the governor and legislators agree upon, whether to borrow the money will be ultimately a question put to the voters this fall. 
  • What “non-budget” items are part of the agreement?  Under New York law, the executive dominates the budget-making process.  Historically, governors have used this enhanced power to drive policy changes that they want.  Governor Hochul is no different.  The state Assembly has argued that policy changes should not be part of the budget (unless they are policy changes that the Assembly likes) and the Senate has also advanced a budget plan that strips out many of the governor’s policy initiatives – although to a lesser degree than the Assembly.  One example is ethics enforcement.  Governor Hochul has pledged to eliminate the much-maligned ethics watchdog and establish a new, independent, one.  Neither house has advanced an alternative, with some legislative staffers arguing that eliminating and replacing a state agency should be done outside of the budget.  How ethics is treated in the budget will be an indication as to how far policymaking will go within the state budget process. 

Last week, the governor advanced a plan to change state laws dealing with bail for individuals charged with serious crimes. Her plan is added to a growing list of policy items – such as the control of New York City’s school system by the Mayor, the acceleration of downstate casino licensing, health insurance for undocumented New Yorkers, housing vouchers for homeless individuals, relief for drivers and homeowners dealing with soaring energy prices, a big public subsidy for a new stadium for the Buffalo Bills, among other topics.
One week from now, we should have some answers when a final state budget should be in place. New Yorkers will have been cut out of the process but should know by next weekend and after-the-fact what is in store for them.

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  • New York State lawmakers are moving closer to a final budget. Both the state Senate and state Assembly have separately advanced budget plans as countermeasures to Governor Hochul’s proposed budget. Last week, both houses began the process of harmonizing their plans in order to meet the March 31st deadline for a final agreement.
  • By now we are all feeling the rising costs of energy. Gas is heading toward $5 per gallon, home heating costs have risen, with some using oil having their prices jump to nearly $6 per gallon. Utility bills have soared. President Biden argues that these hikes are a “Putin tax” – referring to Russian “mob boss” Vladimir Putin’s unprovoked aggression in Ukraine. And while there is a lot of truth to the President’s description, it doesn’t answer one question: Who benefits from this “tax”?
  • This week is a big one in Albany. Both the state Senate and Assembly will focus on the development of their respective “one House” budget plans. These are the budget proposals advanced by the Democrat majorities that control each House. By mid-month, it is expected that the Senate and Assembly will have passed their respective budget plans in each house and will engage in feverish negotiations with the governor to hammer out a final budget deal.