Gov. Kathy Hochul proposed a $216 billion state budget Tuesday that would provide bonus payments to health care workers, bolster funding for schools and clear the way for casinos in New York City.
Hochul’s spending plan comes as the state is in a relatively strong financial position, thanks to a large influx of federal aid and stronger-than-expected tax revenue that have left New York with a projected $5 billion surplus.
And with that infusion of cash, Hochul was able to put forward what she says is a balanced budget that will remain that way for the next five years – a rarity in Albany, where projected deficits are the norm.
“This is a once-in-a-generation opportunity to make thoughtful, purpose-driven investments in our state and in our people that will pay dividends for decades,” Hochul said in a virtual budget address delivered from the Capitol’s ornate Red Room. “And that is exactly what my budget will do.”
But Hochul’s budget declined to replenish funds for a pair of state-run programs that are essentially out of money: The Excluded Workers Fund, which provided grants to undocumented immigrants ineligible for unemployment benefits; and the Emergency Rental Assistance Program, which covered up to 15 months of backrent for those financially harmed by the COVID-19 pandemic.
Hochul and state lawmakers will now spend the next 10 weeks negotiating the particulars of the plan in hopes of getting a budget in place by April 1st, the start of the state’s fiscal year.
Here’s a look at what was – and wasn’t – included in Hochul’s spending plan.
Allowing NYC Casinos
Hochul wants to clear the way for casinos in New York City and the surrounding region, and she wants to do it fast.
In 2013, New York voters approved a change to the state constitution that would allow up to seven private, full-fledged casinos statewide. But an accompanying state law prohibited those casinos from being placed in New York City and surrounding counties until 2023 – unless the casino operators were willing to pay a big penalty to upstate casino owners.
Hochul wants to speed that process up. Her budget calls for ending the moratorium on New York City casinos early and getting rid of the financial penalty.
That would allow Hochul’s administration to begin seeking bids for its final three casino licenses this year.
Robert Mujica, Hochul’s budget director, noted the existing law and Hochul’s proposal do not explicitly state where the casinos have to be located. But he acknowledged most of the interest from bidders will be New York City-focused.
“The three (licenses) will be probably focused in the downstate area, but there’s no restriction there,” he said. “If we get a bid back that’s dramatic, we’re not going to exclude them.”
The nation’s largest market has long been a location prized by gambling interests. When the state Gaming Commission put out a feeler last year, it received 30 submissions of interest for the state’s final three licenses – including major casino players like Wynn Resorts and Las Vegas Sands.
Big Boost In Education, Healthcare Spending
Each year, nearly two-thirds of New York’s budget is flagged for education and health care spending, including the state’s costly Medicaid program. This year is no different.
Among Hochul’s big-ticket items in her budget are a $10 billion plan over multiple years to improve health facilities and bolster the state’s beleaguered health care workforce, which was struggling to maintain adequate levels even before the COVID-19 pandemic.
That includes $1.2 billion to provide frontline healthcare workers with state-funded retention bonuses. Those who stay in their job for a year will be eligible for a bonus of up to $3,000, depending on the number of hours they put in. It’s unclear if the proposal would be applied retroactively.
Those bonuses would go to state employees and non-state employees in the healthcare field, according to Hochul’s administration.
“They're the heroes of this pandemic, so let's stop talking about the debt we owe them and actually pay them what they deserve,” Hochul said.
Education spending – always one of the biggest negotiating points between the governor and lawmakers – would reach $31 billion under Hochul’s spending plan, an increase of more than 7% from the current fiscal year.
Hochul also wants to give $53 million each to the SUNY and CUNY higher education systems to hire more faculty. That money would allow SUNY to hire 340 faculty members and CUNY to hire 540, according to Hochul’s budget office.
An Election-Year Budget
The state budget isn’t supposed to be a political document, but this year it can certainly be seen through that lens. Hochul is up for election in 2022, as are the 213 state lawmakers.
There are proposals in Hochul’s budget plan that would likely be popular with voters heading to the polls and help shape a campaign message as she ramps up her election bid.
Among those priorities would be speeding up $1.2 billion in income tax cuts for the middle class, which were already approved but would be accelerated under the governor’s budget.
Under the prior plan, former Gov. Andrew Cuomo and state lawmakers had those modest tax cuts set to take effect from 2023 to 2025. Under Hochul’s plan, they would take effect this year, so those making less than $250,000 would see a slight cut when they file their taxes next year.
Hochul’s budget would also resurrect a property tax rebate program that expired in 2019.
That program would provide homeowners making less than $250,000 with a check meant to relieve a portion of their property taxes. Those eligible will receive a percentage of their existing STAR rebate, a school tax relief program. About 479,000 homeowners in New York City would be eligible to receive an average check of $425, while 2 million homeowners outside the city would receive an average of $970. The number lower in New York City because the high percentage of co-ops and condos tend to keep effective property tax rates down.
No New Funding For ERAP, Excluded Workers
Hochul chose not to dedicate money specifically to the Emergency Rental Assistance Program, the state-run, federally funded program that was designed to cover back-rent for tenants facing financial difficulties during the COVID pandemic.
Nor did she choose to bolster the Excluded Workers Fund, which provided more than $2 billion of relief to undocumented workers and others who weren’t eligible for enhanced unemployment benefits during the pandemic.
Both programs are essentially out of money.
Mujica, Hochul’s budget director, said the governor will continue to push the federal government to put more money toward the rental program. The state requested an additional $1 billion, but so far has only gotten an extra $27 million from the feds.
Mujica also noted Hochul’s budget flags $2 billion for “pandemic relief” purposes. It will be up to Hochul and the state Legislature to determine how that money should be spent.
Hochul’s budget was a disappointment to the Fund Excluded Workers Coalition, which has been pushing for $3 billion in funding and a permanent, unemployment insurance-like program for otherwise ineligible workers.
“This budget would leave excluded workers to fend for themselves when another wave of the pandemic hits and leaves our state vulnerable to calamity once again,” said Bianca Guerrero, the coalition’s coordinator.