What does Hochul’s budget do for New York City?

The honeymoon period for Gov. Kathy Hochul and New York City Mayor Eric Adams continues. On Tuesday, Hochul gave her first executive budget address, releasing a proposal which includes, among other things, a number of New York City-specific items. Some of them, like extending mayoral control of schools for four years, are likely to make the new mayor happy. 

On Tuesday morning, prior to Hochul’s address, Adams was asked about the state budget at an unrelated press conference. “We met with the governor and her team, and the talks have been great,” Adams said. “We want to continue this collaboration that I have developed with Gov. Hochul.”

In total, the budget proposal projects that state spending on New York City will increase in Fiscal Year 2023 to almost $20 billion in local aid programs. That figure includes school aid and a takeover of some local Medicaid costs. Transit and transportation infrastructure spending and a property tax relief credit are also being directed to New York City, along with the rest of the state.

There’s a long way to go before the governor and state Legislature hammer out a final budget, but here are some of the bigger items, affecting New York City in particular, to come out of Hochul’s $216 billion executive budget proposal.

Mayoral control of schools 

Under this Bloomberg-era system, the New York City mayor is granted control over city schools – but only through the state Legislature’s decision to renew that control every couple of years. Hochul is proposing extending the mayor’s authority for another four years. Despite calls to reform the mayoral control system under former Mayor Bill de Blasio, there doesn’t seem to be much political will behind changing the system now, before the new mayor has had a chance to prove himself. Nonetheless, Hochul’s four-year extension won’t go unappreciated by Adams.

Taking over Medicaid spending

Hochul’s budget proposal has the state taking over more than $5 billion in local Medicaid growth – a measure projected to save New York City $2.6 billion. State takeover of Medicaid cost increases has been phased in over the past decade, following a freeze on the share of Medicaid costs that local governments have to pay.

Casinos in the five boroughs

Hochul wants to open up a request for proposals for three new casino licenses in New York state and end a moratorium on casinos in New York City until early 2023 to allow them to build in the five boroughs sooner. Budget Director Robert Mujica said at a press conference on Tuesday that Hochul’s proposal doesn’t specify the new casinos being in New York City, but noted there’s interest in building there. “The three (licenses) will probably be focused in the downstate area, but there’s no restriction there,” he said.

More spending on education

Spending on school aid statewide would reach $31.2 billion under the budget proposal, including increased spending on Foundation Aid in New York City of $345 million. The proposal also outlines a 4.7% increase of per-pupil funding in city charter schools. Hochul detailed a series of new investments in public higher education, including a $1.5 billion investment over five years in the State University of New York and City University of New York systems and expanding the Tuition Assistance Program for part-time CUNY and SUNY students. 

Expanding theater production tax credit

Like the tax credits film and television productions receive for making their projects in New York, Broadway shows and other live productions in New York City – beaten down by the COVID-19 pandemic –  would also be eligible for a tax credit. Hochul proposes expanding the existing New York City Musical and Theatrical Production Tax Credit, doubling the cap on the program to $200 million and extending the initial deadline to apply through June 2023.

New opportunities for affordable housing

Included in an overall $25 billion five-year housing plan are several measures to expand housing supply in New York City, including repealing a limit on the maximum density of the residential area of city buildings and making it easier to convert hotels into permanent housing.