Reactions to Hochul’s preliminary budget deal

The preliminary reviews for Gov. Kathy Hochul’s “parameters of a conceptual agreement” on the state budget are in. And they’re… lackluster overall. While the announced tentative three-way deal framework – which is still unfinalized with state legislative leaders and lawmakers – garnered some praise, several of the major components of the spending plan received criticism from a range of stakeholders. 

By all accounts, lawmakers were caught off guard by the announcement and unaware of any handshake deal. Assembly Member Alex Bores said he was in session after the Assembly passed the last budget extender. “All of us thought it was a little premature, but I think we share the enthusiasm of actually getting to a deal very soon,” Bores said.  

Assembly Speaker Carl Heastie acknowledged to reporters Tuesday that legislative leaders were very close to a deal but didn’t comment on if Hochul’s announcement was premature. “You should ask her,” he told reporters. 

Housing

Many specifics were still up in the air when Hochul made her announcement on the state leaders’ housing deal, but she said it would include a new 485-x tax incentive to spur affordable housing development in New York City, as well as a six-year extension of the old 421-a program for projects already in the pipeline and a statewide tax incentive for multi-family housing construction. 

The deal also included lifting the density cap for housing construction in the city, incentives for office conversions, measures to help get vacant units back on the market and new tenant protections. “I'm really proud that the fiscal year 2025 budget achieves what so many said was impossible: A transformative deal to reverse the downward spiral on housing stock, all while protecting our tenants,” Hochul said of the housing package agreed to with legislative leaders. “This deal demanded unprecedented, all consuming attention, collaboration, respect… But the three of us were committed to getting this done.”

Much like when the details of a potential housing plan started to get leaked, both landlords and tenant advocates alike blasted the housing package after Hochul’s announcement. This despite the governor providing few if any specific details on what the package will entail aside from confirming that it will be included in the budget and broad strokes of the policy items.

“Governor Hochul is pushing through a housing deal written by the real estate industry to ensure they keep getting richer off the backs of hardworking tenants,” said Cea Weaver, coalition coordinator for Housing Justice for All. “Instead of protecting their constituents, our state leaders are allowing the foxes inside the hen house.” The Met Council for Housing issued similar criticism. “This deal does nothing to make housing affordable or keep tenants in their homes,” the tenant group said in a statement. Tenant advocates say that deep concessions to “good cause” eviction gut the bill, excluding millions of tenants and making the policy nearly impossible to enforce.

But despite the charge that the deal was written by the real estate industry, many landlords and developers didn’t like Hochul’s announcement either. “Already burdened with escalating maintenance and compliance costs, rent-stabilized buildings… have nothing to applaud in Albany’s economics-denying attempt to placate everyone while actually accomplishing nothing,” said Aaron Sirulnick, board chair of the Rent Stabilization Association, a trade group representing landlords of rent-stabilized apartments. The group asserted that changes to individual apartment improvements don’t do enough to help landlords afford necessary apartment improvements.

The Real Estate Board of New York, despite offering tacit praise for parts of the package, still criticized the overall deal. “We are confident that this package falls far short of addressing the city’s housing needs and must be reassessed in the coming years to put the rental housing market on a solid footing,” REBNY President James Whelan said in a statement. He specifically took issue with the inclusion of “good cause” eviction, even with the changes, and said that the 485-x tax incentive program won’t spur as much housing creation as its predecessor 421-a.

The pro-development group Open New York also did not applaud the housing deal overall. “While this housing package includes some positive steps for building homes in New York City, it ultimately reinforces the status quo that allows local governments absolute power to ban new homes, which perpetuates inequitable patterns and worsens our housing crisis each year,” said Annemarie Gray, the group’s executive director. She praised the lifting of the density cap for housing in the city and including a new tax incentive program to build housing, but said the package doesn’t do enough to promote statewide housing growth or to tackle restrictive zoning in the city.

Still, the housing deal did have some proponents, like the New York Building Congress. “With the announcement of this long-needed comprehensive and historic housing agreement, the Governor and the Legislature have demonstrated their commitment to working with diverse stakeholders to finally address our state’s shortfalls to improve the lives of all New Yorkers,” said the group’s president Carlo Scissura in a statement. “We are thrilled this budget will include an extension of 421-a for six years for projects already underway and a new and improved replacement for 421a – 485x – to incentivize genuinely affordable housing with good-paying wages for the workers who will build it.”

On the matter of “good-paying wages,” at least one construction trade union has also praised the deal thanks to the labor standards slated to be included in the 485-x program. “This $40 minimum wage for all construction workers is a monumental accomplishment,” said Mike Hellstrom, vice president and eastern regional manager of the Laborers' International Union of North America. “We thank Governor Hochul, State Senate Majority Leader Andrea Stewart-Cousins, and Assembly Speaker Carl Heastie for codifying our agreement with REBNY to create this $40 minimum wage as part of a new 421-a program called 485-x.”

Another union, 32BJ, offered support for the deal as well. Manny Pastreich, president of the politically powerful service workers union wrote on X that “the housing deal being discussed is a significant and sensible step toward addressing New York’s affordability crisis.”

New York City Mayor Eric Adams also praised the housing deal in a statement following the announcement. “We are thrilled that there has been agreement on most of our core priorities, including the major package of legislation to grow our affordable housing supply and protect tenants…” Adams said, while noting other priorities of his that made it into the spending plan as well.

Medicaid cuts

Hochul’s proposals for an overhaul of the Consumer Directed Personal Assistance Program, a system where New Yorkers with disabilities have greater choice in selecting care professionals, had drawn pushback ahead of Monday’s announcement, but she pushed ahead, saying that one fiscal intermediary would be in charge of the system. She said the swap would save the state $500 million and cut down on purported fraud and abuse in the program, but detractors argue it would reduce the independence of New Yorkers with disabilities.

Caring Majority, an advocacy group for the disabled, came out strongly against the proposal.

“The budget's plan to hand one fiscal intermediary a $7 billion contract will not address our home care challenges – it will merely undermine consumer choice, limit care options and allow tens of thousands of disabled New Yorkers and consumers to fall through the cracks and go without services, all to give an out-of-state company one of the largest contracts in state history,” they said in a statement. 

Environmental policy

Big ticket policy items for environmental advocates like the NY Heat Act weren’t mentioned in Hochul’s announcement of a budget deal. However, she did highlight an increase in clean water infrastructure funding from her proposed $250 million, a cut compared to last year, back to $500 million. Groups like Earthjustice had cause to celebrate the bump in funding while seeking a greater commitment to climate goals across the board.  

“We’re glad that the $500 million for water is being maintained, however, the absence of climate mention or energy affordability is alarming,” said Earthjustice’s New York Policy Advocate Liz Moran in a statement. “We need Governor Hochul and the Senate to champion NYHEAT, the only, and most important, energy affordability and climate measure on the table. Additionally, we need the Assembly to defend New Yorkers suffering from high energy bills and not position themselves protecting National Fuel’s bottom line.”

The Nature Conservancy also praised the funding bump in a statement posted on X, lauding Hochul and legislative leaders for their commitment to providing clean water for New Yorkers. 

The Allegiance for a Greater New York also viewed the budget’s climate policies as lacking. 

“Without serious action for climate and worker justice, Governor Hochul’s budget checklist remains incomplete,” said ALIGN Executive Director Theodore A. Moore. “Investments in environmental conservation are commendable, but they will be meaningless without significant efforts to prioritize a just transition away from fossil fuels. We need urgent legislation like the NY HEAT and Climate Change Superfund Acts in full and at least $1 billion for resiliency projects.”

School aid and mayoral control

Organizations have yet to weigh in on changes to Foundation Aid, as there are few details available on how exactly Hochul plans to tweak how the formula accounts for inflation. 

Hochul did not comment on mayoral control Monday after reports emerged that it was back on the table for the budget. Supporters of mayoral control of New York City schools did descend on Albany once it was clear that talks about including it in this year’s budget were revived, and the United Federation of Teachers, New York City’s largest teachers union, reemphasized that mayoral control needs reform.

Charter school advocates were pleased by the reports. “If what we're hearing is true, then it's clear that the Governor and the Mayor have fought hard to deliver an extension of the best governance structure for New York City's public school students,” said Crystal McQueen-Taylor, executive director of the pro-charter school group StudentsFirstNY, in a statement. “We're thrilled to have been a part of this win for kids and families, and we're looking forward to celebrating a final mayoral accountability agreement soon."

Fiscal

The Citizens Budget Commission, a fiscal watchdog group, expressed dissatisfaction with the budget framework presented on Monday. 

Hochul and her budget director Blake Washington stressed they were keeping the state’s reserves at 15%. Also, resisting a push from many lawmakers to increase taxes on the wealthy, Hochul did not introduce new levies in her budget.

“From the reported details, instead of using strong receipt growth to stabilize New York’s fiscal foundation, the budget adds unaffordable spending that increases future gaps,” said CBC President Andrew Rein. “Fiscally, it simply takes the State further in the wrong direction.”

The Fiscal Policy Institute criticized the budget, saying it didn’t do enough to stem population loss or increase affordability. 

“With a rebounding economy, shrinking budget gaps, and a growing millionaire population, New York is well-positioned to support new public investments through increased tax rates on high earners,” it said in a statement. “Instead, this budget misses critical opportunities to invest in the SUNY and CUNY systems, address the growing share of financially distressed hospitals, rebuild the public sector workforce and pursue a long-term affordable housing strategy.”

Retail theft

Hochul’s plan to increase penalties and enforcement against retail theft and those who assault retail workers was realized in her handshake agreement with lawmakers. Initially, there was trepidation from lawmakers unsure if increased penalties were the right remedy. 

Business leaders in New York City applauded the new measures in the state budget proposal. 

“These important steps will implement additional protections for retail workers, improve accountability and offer a needed tax break for businesses to upgrade their security systems,” said Tom Grech, president and CEO of the Queens Chamber of Commerce and Randy Peers, president and CEO of the Brooklyn Chamber of Commerce in a joint statement. 

The Retail, Wholesale and Department Store Union applauded increased protections but expressed frustration over the lack of their favored bill in the budget.

“Any solution without the Retail Worker Safety Act S8358/A8947 is incomplete,” it wrote in an X post.