Gov. Kathy Hochul unveils her 2024-25 executive budget proposal in the Red Room at the state Capitol on Tuesday, Jan. 16. (Photo courtesy Mike Groll/Office of Gov. Kathy Hochul)

Gov. Kathy Hochul has unveiled her $233 billion executive budget proposal for New York’s 2024-25 fiscal year.

Hochul said in the Red Room at the state Capitol Tuesday that despite a $6 billion, or 4.5%, spending increase, her budget proposal would not raise income taxes.

The state is projecting a $4.3 billion budget gap in the coming fiscal year, though Hochul says that gap will likely be much less because of $2 billion in unexpected tax receipts. The state’s Medicaid spending alone will exceed its projections by $1.5 billion, meaning that the state will need to pay a total of $3 billion in Medicaid costs this year. Hochul said that after the federal government ended its pandemic supplemental support, the state was left to find money to maintain coverage at a cost of an additional $400 million annually.

In her executive budget, Hochul outlined the numbers behind her wishlist for the upcoming fiscal year, which she broadly outlined in her State of the State address last week. Her priorities include packages that aim to address a wide swath of issues, including crime prevention, the elimination of barriers to treatment for mental illness, addressing the youth mental health crisis and deficiencies in the broader health care system. She also hopes to invest in improving reading proficiency, swimming ability and consumer protections. She hopes to improve the state’s climate resiliency and to “harness the power” of artificial intelligence through a $275 million, 10-year investment plan into an AI consortium. Hochul proposed creating a new state Office of Civil Service to connect people with volunteer opportunities, proposed efforts aimed at curbing the prevalence of harmful algal blooms, hold steady funding for PFAS monitoring from “legacy industrial sites” and expand funding for municipalities contending with PFAS contaminants. She’s also pushing for more funding to increase water infrastructure grants for small, rural communities from 25% to 50% of net eligible project costs. The budget proposal includes $100 million for the Downtown Revitalization Initiative program and $150 million for the annual Regional Economic Development Council awards.

Hochul’s budget also includes $82.5 million in new capital investments for the Lake Placid-based Olympic Regional Development Authority, which, if approved by the state Legislature, would be $2.5 million more state funding than ORDA budgeted for. ORDA spokeswoman Darcy Norfolk said that the capital funding would be “invested in lifts, snowmaking, electrical and building infrastructure, year-round operational infrastructure and economic development opportunities.”

Hochul’s proposal also includes $400 million for the Environmental Protection Fund, no change from 2023-24, as well as $435 million for flood resiliency projects, $500 million for clean water projects, $100 million for superfund cleanup, $47 million to plant 25 million trees by 2033 and $250 million for a “voluntary buyout program” for owners of property in flood-prone areas.

The state Department of Environmental Conservation would receive $95 million to “ensure the safety and durability of our state’s dams, rehabilitate campgrounds, and upgrade a variety of widely used recreational facilities,” as well as providing “critical repairs to other public property, including wetlands, trails, waterfronts and fish hatcheries,” Hochul’s budget book reads.

Hochul again emphasized the need for the state to address the housing crisis — she said that this issue must remain at the forefront. This echoes her State of the State address last year, when she proposed a housing plan that ultimately failed after it faced backlash over city suburb provisions and local zoning overrides.

At least 10,000 people in New York City are living in homeless shelters despite having housing vouchers because there are no apartments available, Hochul said. She’s proposing new tax incentives for development, incentives for converting office buildings into housing, eliminating restrictions on residential density restrictions and creating a pathway to legalizing basement apartments.

“The answer, my friends, is not blowing in the wind — it’s shovels in the ground,” Hochul said, referencing the 1963 Bob Dylan song “Blowin’ in the Wind.”

Hochul proposed the state invest $500 million to build 15,000 units on state-owned land — Hochul’s office said state agencies have identified former correctional facilities, areas near commuter rail stations and SUNY properties which could accommodate up to 15,000 new units of housing across the state — and earmark another $25 billion to build 100,000 homes.

Unlike her State of the State address, where Hochul made no mention of the migrant crisis pushing the city of New York’s shelters and resources beyond its limits, Hochul made a point on Tuesday to underscore the financial impact this crisis will continue to have on the state’s finances if the federal government does not address the unprecedented influx of arrivals at the southern border.

“New York continues to carry the burden of housing 79,000 migrants,” Hochul said. “This is ultimately the responsibility of the federal government to address this crisis.”

Hochul said that she planned to travel to Washington, D.C. this week to encourage federal lawmakers to address the migrant crisis. But she sees this continuing to impact New York state, and that’s reflected in her executive budget.

She noted that in this past fiscal year’s budget, the state earmarked $1.5 billion to aid New York City with this crisis, a cost which ultimately increased to $1.9 billion. Her executive budget includes $2.4 billion — which will require taking $500 million from the state’s reserves — to help the city manage the crisis.

“We have no choice but to plan for those costs again in this year’s budget,” she said.

Hochul said that this was the right thing to do and necessary for the economy, because businesses will not want to operate in New York “if there’s thousands of people sleeping on the streets.” She added that she wants to ensure that migrants and asylum seekers can find work.

“That’s exactly what they came here for. That’ll continue to be our focus,” she said.

“Where do we put people? It’s not like we’ve got a lot of housing available,” she added.

For schools, Hochul is proposing $35 billion in school aid, up by 33% compared to 2021.

Her package to expand mental health care would increase state spending on mental health from $3.3 billion to $4.8 billion, and would include $55 million in funding for 200 new inpatient psychiatric beds, $45 million in funding for school-based services, $43 million for supportive housing units for those in need of psychiatric services and $37 million for new programs for homeless New Yorkers, among other initiatives.

From the Opioid Settlement Fund, $67 million is earmarked for harm reduction, addiction prevention and recovery services. This fund stems from settlements New York Attorney General Letitia James reached with drug companies involved in manufacturing, distributing and selling opioids totaling over $2.6 billion.

Her executive budget is only a proposal; the state Legislature still needs to review and approve a state budget. The budget deadline is April 1.

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Local representatives have mixed reactions on budget

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Assemblyman Matt Simpson, R-Brant Lake, said Hochul’s executive budget “lacks solutions.” While she claims the proposal will not raise income taxes, he said “it will ultimately raise taxes nonetheless.”

Asked how firm she was on not raising income taxes, and asked what she would say if the state Legislature tells her that they need to raise income taxes, Hochul told press at the Capitol: “Yes, I will say no.”

New York is already the highest taxed state in the nation, Simpson pointed out, adding that this budget will contribute to that instead of reversing it.

“Every year we hear the same thing, ‘New York is better.’ But every year people and businesses leave for more affordable states while the quality of life continues to diminish here,” Simpson said in a statement.

“Education and our future generations should receive additional funding to ensure schools can properly operate,” Simpson said, adding that “Hochul plans to lower the amount of funding our public schools will receive to help our students and teachers rebuild what was lost during COVID.”

School aid is up by 33% compared to 2021 in Hochul’s proposed budget, up to $35 billion, but Simpson spokesperson Amanda Braynack said “there is concern the funding will shift away from public schools since the funding was not significantly increased this year.”

Simpson said in the coming days he will be reviewing the details of the money Hochul pledged toward a housing plan, the migrant crisis, public safety and New York’s long-term fiscal situation. He said he wants “to ensure hard-earned taxpayer dollars are not wasted.”

State Sen. Dan Stec, R-Queensbury said he was glad Hochul acknowledged the looming budget deficit, but said her plan does not address the problem.

“Proposed spending is $233 billion, a 4.5% increase over last year’s record-setting budget,” he said in a statement. “Combined with an acknowledged $6 billion in lost tax receipts due to our state’s ongoing outmigration woes, and despite some fuzzy math that shows a budget surplus instead of an anticipated deficit, this is ultimately a costly proposal that does nothing to alleviate New York’s long-term financial difficulties and right the ship going forward.”

Similarly, he was glad Hochul acknowledged the state went more than $1 billion over budget with Medicaid spending in the last fiscal year, but said he did not hear anything to lower these costs for both state and local governments.

He took issue with the $2.4 billion in funding for the migrant crisis, which he said has been handled “poorly” by Hochul, New York City Mayor Eric Adams and the current presidential administration.

“This is aid that should be going to legal residents and taxpayers,” Stec said.

“On a more positive side,” Stec said, he was pleased with funding for ORDA venues in Lake Placid and proposal to use empty state facilities, such as closed correctional facilities, for housing.

“That development, however, is offset by the fact that her proposal contains language authorizing further correctional facility closures,” Stec said. “If this comes to fruition, it could potentially have a detrimental impact on our region.”

Overall, he’s still waiting for “the particulars” on the budget, and hoping things can be improved.

Assemblyman Billy Jones, D-Chateaugay Lake, said he wished Hochul’s proposal included more for the North Country and needs here.

“The proposal also includes bold ideas for economic development across the state, but I need to see how this will impact the North Country and the communities with the Adirondacks that I represent,” he said in a statement.

He was glad the proposal keeps education funding stable, but said he needs “more details on how it will address the needs of local school districts.”

Jones was happy the budget again included FAST NY funding for manufacturing development. Jones said this was his bill originally in the 2023-24 budget.

He was also “disappointed and concerned” about the idea of more correctional facilities being closed through the state budget process.

“It will negatively affect communities like the North Country who depend on them,” he said.

“Overall, I want to see more included in the budget addressing infrastructure, housing and real property tax relief in our region to help meet the needs of our communities,” Jones added. “But I will be working with my colleagues in the state legislature in the upcoming weeks to make sure our voices are heard.”

— Staff Writer Aaron Marbone contributed reporting.