Hochul proposes $227B budget to boost school aid, health care and anti-crime efforts

Gov. Kathy Hochul has proposed a $227 billion state budget on Wednesday, a plan that would increase direct aid to schools and health care networks, fund measures meant to bolster public safety and law enforcement, as well as expand housing in New York.

State and federal spending would increase by 2.4%, or more than $5 billion, over the previous budget.

Hochul’s plan does not include any broad-based increases in the personal income tax, but calls for a hike on payroll taxes for predominantly downstate companies in order to fund mass transit. She also wants to increase cigarettes by $1 per pack.

The budget also includes $1 billion for a broad array of services meant to aid newly arrived migrants in New York.

The budget is due to pass by April 1, and the introduction of the spending plan launches what is expected to be a heated two months in Albany over the direction of billions of dollars in state spending with the Democratic-controlled state Legislature.

Already, fissures are opening with Hochul and lawmakers from her own party who control the state Senate and Assembly.

For example: Hochul’s budget includes a provision to index the state’s minimum wage to the rate of inflation; progressive advocates and lawmakers want to also increase the base wage from $14.20 in upstate counties and $15 in the New York City region to $21.25 within the next for years.

Hochul and lawmakers will also clash over her plan to include changes to New York’s controversial law that ended cash bail requirements for many criminal charges. The provision, included in the state budget, would end the “least restrictive” standard for serious, bail-eligible offenses.

Hochul wants to eliminate the regional cap on charter schools in New York City while also allowing for the growth of charter schools by re-issuing charters that may have closed after July 2015. She also wants to aid charter schools in New York state, with an increase per-pupil funding for New York City charter schools by 4.5%.

Both are a provision that will likely lead to staunch opposition from the state’s politically potent teachers unions.

The budget is being proposed, also, amid heigtened economic uncertainty for New York. Hochul has said she does not want to raise income taxes on the wealthiest New Yorkers, a stance opposed by progressives who are calling for tax hikes to further fill the state’s coffers.

The budget is set to report an $8.7 billion surplus by the end of March, when the fiscal year ends. But next year, a budget gap of $5.7 billion is projected if spending and revenue does not change.

Here are some additional measures in the budget:

Health care

The budget proposes increasing Medicaid rates by 5% for hospitals, nursing homes and assisted-living providers. The rate increase had been called for by health care facilities as they face ongoing financial problems in the wake of the COVID-19 pandemic and with ongoing labor shortages.

Housing

Hochul wants to expand housing in the state by building 800,000 new units, counting those that are already in development. The budget includes a plan that would allow projects to move ahead over the objections of local zoning regulations if a community is failing to meet targets.

The budget also would add $890 million in capital spending to construct 2,150 new residential beds meant to aid people with mental illnesses.

Public safety

Hochul’s budget includes the proposal to tighten the state’s bail law. She wants $40 million for funding discovery law changes that have required local prosecutors to make evidence available to defense counsel on a fast basis. The budget also backs $20 million for pre-trial services.

Hochul has also proposed $50 million to aid communities affected by gun violence and $35 million in capital grants for combatting hate crimes. She wants $80 million for the renovation of a new state emergency operations center and $100 million for a new forensic laboratory.

School aid

Hochul wants to spend $34.5 billion on school aid, a record level that has long been favored by education advocates. It is a $3.1 billion increase of 10%, the largest year-over-year hike in spending. The budget includes a $2.7 billion increase in foundation aid, which provides direct money to schools.

Tax breaks

Hochul wants to extend the production and post-production tax credits for another five years. She wants to increase the annual funding of the credits to $700 million. Tha would include $45 million for the post-production tax credit. There would also be expanded aid for re-locating TV series to New York.

And Hochul wants to extned tax credits for New York City musicals and theatrical productions and increase the overall cap on the program from $200 million to $300 million.

The budget backs the creation of a tax credit for child care creation and expansion. The move is meant to incentivize and support new child care programs, and businesses that create new child car eseats or expand existing child care would receive a refundable credit.