How Hochul’s budget proposal might stir the pot

Tensions between Gov. Kathy Hochul and lawmakers have been on the rise since the announcement of her chief judge nominee late last year and have only grown since then. Despite some apparent concessions included in her executive budget, the governor’s fiscal proposal also includes some contentious plans that are sure to raise the heat in the Capitol even more as negotiations get underway.

Easily one of the most high-profile proposals sure to fan the flames is Hochul’s bid to once again make changes to the state’s bail laws. This time, she wants to give judges greater discretion to set bail for the most serious offenses. First put forward in her State of the State address, the governor’s fiscal plan includes the specific language of the changes she wants. While it keeps in place the “least restrictive” standard for pretrial conditions for non-bail eligible offenses, the new language excludes crimes that are already bail eligible from the “least restrictive” standard while offering a list of factors for judges to consider when making a determination about bail.

Prior to the release of the executive budget, Assembly Speaker Carl Heastie said he wanted to wait until he saw the language before opining on the governor’s bail proposal, while state Senate Majority Leader Andrea Stewart-Cousins said she wanted to thoroughly review available data to determine what, if any, changes to the law should be made. However, both legislative leaders have been resistant to changes in the past. And on Wednesday, Heastie told reporters that he doesn’t believe that crime has been driven by bail reform.

Changes to bail held up the budget process last year when the governor unexpectedly released a public safety plan shortly before the budget was due, refusing to agree to a deal unless the Legislature agreed to changes. This time around, Hochul said she’ll be “working in a collaborative way” when asked whether she would hold up the budget again over bail. “We have a very narrow focus,” Hochul said. But the suggested rollback gained quick criticism from a number of leftwing and criminal justice organizations, including The Legal Aid Society, New York Communities for Change and the Working Families Party, setting the stage for staunch opposition from lawmakers during negotiations. 

Hochul’s proposal to lift the New York City charter school cap also sparked criticism, with a number of lawmakers immediately coming out against the plan. The governor suggested combining the statewide and city caps into one, which would open opportunities for new charters to get approved in the Big Apple. State Sen. John Liu, chair of the New York City Education Committee, called the idea “a nonstarter” in a statement released after the Hochul released her budget. “The cap has historically served to strike the balance between giving parents so-called ‘choice’ and the constitutional requirement to keep public schools open, and it’s not common sense to upset that balance.” 

Liu also joined with state Sens. Shelley Mayer – chair of the Education Committee – Robert Jackson and Jabari Brisport – both with a long track record of public school advocacy – to release a joint statement condemning the Hochul’s charter school proposal. The group said they are “deeply disturbed and disappointed” by the prospect of lifting the cap.

Another potential fight comes with Hochul’s ideas for the Metropolitan Transportation Authority, which relies on a subway fare hike from $2.75 to $3.00 and did not include substantive proposals on how to improve service at a time when the system is still bouncing back from record-low ridership during the pandemic. State Sen. Mike Gianaris – the deputy majority leader – and Assembly Member Zohran Mamdani have proposed a package of bills in December dubbed “Fix the MTA” that would freeze fares and move toward free bus rides over the course of four years with new sources of revenue for the beleaguered transit authority.

Gianaris did not speak highly of the governor’s MTA plans after she released her budget. “The time to simply fill ongoing holes in the MTA’s financial picture should be at an end,” Gianaris said in a text to City & State. “We need to treat mass transit with the commitment it deserves if we want it to function as it must, and that means a more significant commitment to freeze fares, improve service and provide free buses.” As Stewart-Cousins’ No. 2 in the state Senate, Gianaris has more influence over the budget process than the average lawmaker.

Hochul’s proposal does not include the key aspects of the proposal even as she suggested increasing the Payroll Mobility Tax to help fund the MTA as its finances continue to struggle, a move that Mamdani praised. But he said that does not go far enough. “We must return to NYC with a budget that truly makes our transit system safer, more affordable, and more livable,” Mamdani said in a statement. “Now is the time, and we have the untapped revenue in our state to make it happen.”

That “untapped revenue” is yet another point of contention. Leftwing lawmakers have been pushing to increase taxes on the wealthy in a number of ways, but true to her word, Hochul proposed no new taxes, nor any significant new revenue raisers for the upcoming fiscal year. In what appeared to be a minor concession, the governor did propose extending a corporate tax hike set to expire for an additional three years, a move that would bring in $810 million in the 2025 fiscal year (the 2024 fiscal year still has revenue coming in from the increased tax rate regardless of its renewal status).

Leftwing advocates have called to make the temporary corporate tax rate permanent, making the governor’s proposal a compromise of sorts. She’ll likely also find common ground with the Legislature on her minimum wage proposal, which received praise when she first announced it as part of her State of the State address, as well as her “cap and invest” plan to raise money from companies that pollute while slowly reducing those polluting allowances. But traditionally, the Legislature responds to the executive budget with more spending, which goes hand-in-hand with new revenue raisers as well. 

In Gov. Andrew Cuomo’s final year in office, legislative leaders won a significant victory in getting the corporate tax rate temporarily increased, as well as approving a tax hike for the state’s top earners. But even then, the projected $4.3 billion in new revenues starting in 2022 fell short of the $7 billion legislative leaders proposed in their one-house budgets. While they didn’t push for new taxes as hard last year, the growing tension between Hochul, rank-and-file lawmakers and Stewart-Cousins especially (though they both deny any issues exist between them) likely means that the Legislature isn’t going to play nice this year, and pushing for new revenue often tops the agenda when playing hardball.