By Brendan J. Lyons,
Albany Times Union

ALBANY — Gov. Kathy Hochul unveiled a $260 billion budget proposal on Tuesday that she said will expand access to mental health services, child care and housing at a time when New York’s high cost of living continues to be a significant challenge for her administration.

Her office said the spending proposal — a 0.7% increase over the current budget — represents an improved financial condition for New York five years after it was struggling with a pandemic-induced recession that had left the state’s “rainy day” reserves at $2.5 billion; that number has now climbed to more than $14 billion.

“We still have the highest reserves of any administration — percentages and actual — in state history, and this budget continues to protect New York’s fiscal stability,” Hochul said. “Here’s the good news, revenues have continued to exceed projections, driven in part by record Wall Street bonuses. … We already have the most progressive tax structure in the entire country, which means this: when the economy is strong, and particularly when high-net worth individuals and employers earn more, our revenues rise, and that’s why we’re able to invest more, without asking New Yorkers to pay more.”

The executive budget, which includes many proposed policy measures and statutory changes, will serve as the framework for negotiations with the Legislature over the next several months. 

The proposal includes an updated and improved economic outlook that reflects “stronger wage and bonus growth, continued stock market strength fueled by expected growth in the technology sector, and slower than expected impacts from the tariffs.”

The spending plan does not include a proposal to raise personal income or corporate tax rates. It anticipates there will be a decrease of more than $10 billion in federal funding and cites risks ahead if economic growth slows or inflation ticks up. Global uncertainties, natural disasters and the state’s reliance on federal funding are all factors in that forecast.

It is the governor’s fifth executive budget — and one that again increases spending — since she ascended to the office in 2021 following the resignation of Andrew M. Cuomo. Hochul claims the plan will lower prices for child and health care, as well as curb New Yorker’s soaring utility bills and insurance rates, which are among the highest in the nation.

“While we’ve made real progress, my commitment to tackling New York’s housing crisis is as strong as ever,” Hochul said, adding that New York is in the fifth year of a $25 billion housing plan that she said will meet its goal of creating 100,000 new homes.

The $4.5 billion to fund child care services includes statewide universal pre-K, and financial support for new preschool programs in New York City that will serve 2- and 3-year-olds. She is also proposing the creation of child care pilot programs in certain counties, and loosening zoning regulations to increase child care capacity.

There are also many giveaways that will be funded by taxpayers, including free school meals for all students regardless of income, free tuition for qualifying community college students who are ages 25 to 55, and a downpayment assistance program for first-time homebuyers.

The state has been dealing with a cost-of-living crisis for years that many lawmakers have blamed for New York’s steady exodus of residents and businesses. Republicans have criticized the state’s regulatory landscape as stifling business development and contributing to the outmigration that has sent many former New York residents to southern states. 

Nassau County Executive Bruce Blakeman, the Republican gubernatorial candidate challenging Hochul this year, issued a campaign statement saying the plan “doubles down on the policies that have made New York unaffordable by pouring billions into migrant services while leaving families, seniors, and hardworking New Yorkers with higher bills.”

“People can’t afford rent, groceries, energy, or property taxes, and Hochul’s answer is to spend billions on migrants and stick everyone else with the bill,” Blakeman said. “That’s why New York is unaffordable.”

He noted that Hochul’s budget allocates $4.3 billion for migrant shelters, health care, and legal services “with no cap and no end date, while Medicaid spending jumps roughly 11% as free health care for illegal migrants continues.”

Blakeman said the governor’s spending proposal does not disclose how much of the multibillion-dollar increase in Medicaid spending is driven by health care services for migrants. 

“The migrant crisis isn’t paid for in Albany; it’s paid for at your kitchen table,” he said. “Billions spent on migrant housing, health care, and legal services show up as higher taxes, higher insurance premiums, and higher utility bills for families who are already struggling.”

Hochul has also sought to address funding for schools, which has historically represented a perennial fight among lawmakers in Albany. Her proposal is for the state to fully fund Foundation Aid for schools. 

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