At long last, over a month after the April 1 deadline, Governor Kathy Hochul and the New York State Legislature reached the final $254 billion budget agreement, the state’s largest ever, though not by far. It wasn’t particularly surprising that it took an eternity to complete this, which went through an acrimonious process that was almost completely out of view to journalists, the public, and, to some extent, many legislators themselves. The era of “three men in a room“ is over, insofar as two of those people are now women, but the underlying principle seems to have stuck around.
In my view, the biggest story of the budget process is the absolute uncertainty of the coming months, especially with regards to the federal government. The slash-and-burn approach of the Trump administration and its DOGE commissars under Elon Musk has been unpredictable, to put it mildly, with cuts targeting everything from grants to cities and states to individual benefits and broad government services. One thought I’ve been fascinated with is the extent to which cities and states will have to do something akin to service replacement for things that the federal government is stepping back from. As the feds walk away from tasks like health inspections and weather forecasting, for example, will states like New York attempt to do their own versions?
There is, of course, an unavoidable difference in scale. The federal government can afford to spend amounts that we simply cannot replace. In just one example, the administration has proposed massive, multi-billion-dollar cuts to discretionary spending around housing assistance, including Section 8 vouchers for the elderly. These are investments of a level that the city and state would be hard-pressed to make up, especially if they’re on various fronts: education, housing, health, transportation, and so on.
This is also somewhat of a double whammy because federal revenues are already baked into city and state budgets. Their disappearance not only means that the city and state would have to spend more, but that a chunk of the revenues it was relying on for its existing budget calculations vanishes overnight. These can have cataclysmic chain reactions. Section 8, for example, not only provides rental assistance for tenants in private apartments, but thousands of residents of NYCHA, an entity that is already struggling under the weight of tens of billions of dollars of estimated costs to get the system as a whole up to good repair. The result would not be some sort of abstract or slow-moving crisis; conceivably tens of thousands of people would suddenly be unable to pay rent, except now without the types of protections that helped head off some of the worst outcomes during, say, Covid.
Hochul and the Legislature are aware of this and tried to engineer some new spending as part of what the governor has called her “affordability agenda.“ A big plank of this was increasing funding for childcare vouchers that were facing a fiscal cliff as federal money ran out, and her signature proposal of offering tax rebates for most taxpayers in the state–these will be relatively modest gains compared to the scale of not only the federal government cuts, but a recession that’s looking increasingly probable. The budget also kept some tax hikes on high earners and added some modest ones on larger businesses for the purposes of shoring up the MTA’s $68 billion capital plan as the system faces the specter of cuts, plus the Trump administration’s obsession with trying to ax the congestion pricing program. Funding for institutions like CUNY was kept relatively level from initial proposals.
Nonetheless, Hochul was clear from the get-go that the state would not attempt to fully infill where the feds were falling short, nixing, for example, the legislature’s efforts to get a $200 million expansion of the state’s energy assistance program — spurred by Trump’s gutting of a federal counterpart — and a big cost-of-living increase for the myriad nonprofits that provide the bulk of New York’s social services.
The budget is also where controversial policies — which would be hard to pass standalone — happen. This time around, some of the big-ticket items included discovery reform, involuntary commitment changes, and a proposed prohibition on mask-wearing that sucked in a lot of related controversies on free speech and crime. Ultimately, legislators and the governor settled on creating a new crime that can only be charged in tandem with a separate misdemeanor or felony for wearing a mask specifically with the intent to conceal identity in the commission of that other crime.
The discovery issue had involved deadlines for prosecutors to turn over incriminating evidence to defense attorneys, which were tightened to much fanfare in 2019. Some lawmakers considered it effectively a loophole allowing criminals to get off on what they called technicalities after cases were dismissed when prosecutors failed to turn over the evidence in the allotted time frame. It’s all a bit complicated, but the resulting deal would, generally speaking, allow judges to use some discretionary authority to allow prosecutors to “cure” deficiencies without dismissing cases outright.
That these were some of the main sticking points I think pretty clearly illustrates that public safety remains top of mind for the governor and many lawmakers, even as crime in New York remains at near historic lows. Hochul had also pushed for additional funding to allow more NYPD officers to ride New York City subways overnight.
Now that this is done, negotiations around the city budget will kick into higher gear. So far, it looks like New York City‘s budget will also be the largest ever, though Mayor Eric Adams — fresh off the dissolution of the federal criminal case against him, and as he faces extremely stiff opposition in his campaign for reelection — has emphasized that it will retain unprecedented rainy-day reserves and heavy investments into housing and childcare. This year, the name of the game is cost and public safety, not necessarily surprising in the face of generalized insecurity as the federal administration seems to try to move in a nakedly authoritarian direction that also threatens the global economy. How this all plays out is frankly anyone’s guess, though our political leaders are forced to plan for a long term that’s increasingly hazy.
