Last week, Governor Hochul unveiled her $260 billion budget plan for the upcoming fiscal year, which starts on April 1.The governor’s plan contains measures that she had discussed in her State of the State address given a week earlier.
Her proposed budget achieved, on paper at least, a difficult political “triple play”:She offered a budget that she said was balanced (despite concerns over a projected deficit and health care cuts from Washington), proposed spending a lot more on childcare, and does so without raising personal income tax rates.This delicate budgetary balancing act is possible largely due to a much-larger-than-expected Wall Street performance that has swelled the state’s coffers.According to the governor, the state will get more than $3 billion more than expected this year and more than $5 billion additional in the upcoming fiscal year.
The governor’s budget covers a lot of ground, but her planned increase in spending more or less keeps up with projected inflation.The governor described it as “not an austerity budget, but it is a disciplined one.”
Her budget would extend a business tax that was expected to expire – which would have dropped the rate from 7.5% to 6.5% – but her additional revenues relied heavily on the expectation that 2026 would be a good year for Wall Street.Indeed, Wall Street’s performance over the years has exceeded state budgeteers’ forecasts, a point made by some fiscal watchdogs that the governor could spend even more to provide necessary services.
There is a strong case to be made that Albany’s cuts to essential programs have hurt the state and that more spending is needed.Take state assistance to private colleges, for example.New York policymakers have hammered public support for private colleges found in the Unrestricted Aid to Independent Colleges and Universities program (known as “Bundy Aid”).Bundy Aid directs financial support to independent colleges.
Once a vital component of independent colleges’ finances, the program has been decimated by cuts over the past four decades.The peak state support occurred during the 1989-90 fiscal year, when nearly $114 million was appropriated.During the current fiscal year, that amount has been reduced to under $20 million.If New York had merely kept pace with inflation, the amount of Bundy Aid would be around $260 million – not less than $20 million.
The result?Not surprisingly, many colleges – usually small ones – have seen their finances become damaged or worse.According to New York education officials, over the last 18 years, New York has lost seventeen independent colleges, universities, and other degree-granting institutions.Those campuses are, unfortunately, not alone when it comes to financial concerns.In a recent review of colleges conducted by Forbes, nineteen of New York’s 72 colleges and universities (26%) received poor financial grades (C- or D).
Does the governor do anything in her budget to reverse that trend?She does not.
When it comes to environment, the governor’s plans are also weak.The governor’s budget does little to reverse the New York’s anemic efforts to comply with existing state Climate Law.Yet, the governor did herald the coming of more nuclear power for the state.Still left unanswered after decades of promises is, where will the nuclear waste go?Currently, those wastes are being stored, likely forever, at the locations of these power plants.Building more nuclear plants will just make that storage problem worse.In addition, nuclear power is an incredibly expensive way to generate power, which flies in the face of the governor’s “affordability” promises.
Moreover, despite another state goal – to recycle the amount of garbage generated by 85% by the year 2050 – the governor proposes nothing significant to achieve that ambitious goal.This failure comes on the heels of a state-sponsored report that found New York’s existing recycling efforts “lackluster.”
The budget did not ignore environmental needs entirely, but the governor’s plan was essentially to maintain the status quo.The governor proposed to maintain funding for the Environmental Protection Fund and in one area added spending.The governor proposed adding $250 million to the state’s water infrastructure fund, with the additional monies earmarked for water infrastructure that supports housing development.
But when it came to the big environmental issues of climate and garbage disposal, little new was offered.Why did the governor fail to address them in any meaningful way?Once state lawmakers begin their budget hearings, with one focused on the environment this week, perhaps the public will find out more about the governor’s thinking in these critical areas.
Blair Horner is senior policy advisor with the New York Public Interest Research Group.
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