Hochul’s State of the State: What’s in it for New York City?

Among the legislative priorities for 2024 that Gov. Kathy Hochul announced at her State of the State address on Tuesday were a few proposals that could have a direct impact on New York City. 

Hochul’s 181-page State of the State plan includes housing proposals that Mayor Eric Adams has advocated for, including replacing the 421-a tax break and allowing denser residential construction. Some of the mayor’s other most pressing concerns, including an extension of mayoral control of schools and action on the migrant crisis, didn’t feature in the plan. Hochul said in her speech on Tuesday that she would discuss “fiscal issues like caring for migrants” in her budget address next week. Adams will be releasing his preliminary budget on the same day, and the city’s migrant spending is sure to be a central focus. 

One of Adams’ top priorities is mayoral control of the New York City public school system, which is set to lapse in June after a two-year extension. Lawmakers will again need to consider whether to extend the mayor’s control over public schools.

Another priority for Adams is securing the authority for municipalities to shut down illegal smoke shops, as that authority currently rests with state regulators. Close Adams ally Assembly Member Jenifer Rajkumar is leading that effort in the form of a new bill.

Adams has maintained a mostly amicable relationship with Hochul, even as New York City continues to handle the influx of tens of thousands of asylum-seekers largely on its own. Lately, Adams has reserved more of his ire at being left alone to handle the migrant crisis for the federal government, rather than the state. The state has so far earmarked nearly $2 billion towards migrant costs, but it remains to be seen whether longer-term policy solutions will come out of Albany this year.

While Adams attended Hochul’s address on Tuesday, challenging work lies ahead for his administration in Albany. In his two years in office, Adams has walked away from session with mixed bags. Though the administration has celebrated wins like an expansion of the Earned Income Tax Credit and some bail reform rollbacks in the last two years, other key priorities like his desired four-year extension of mayoral control and a tax break for housing developers went unmet. 

In Adams’ first year in office, his administration was accused of not sufficiently engaging with lawmakers on their priorities. Some of that work has already begun this year, Politico New York reported. 

Adams isn’t entering Albany this session at the height of his political power. Far from it. He’s facing multiple investigations, dismal poll numbers and doubling down on unpopular city budget cuts. But in her address on Tuesday, Hochul highlighted several initiatives that could directly impact New York City, even if some of the mayor’s top priorities went unmentioned. 

In a statement sent out shortly after Hochul’s speech, Adams praised the governor for taking on housing creation strategies that he’s backed, and for her proposal to grant localities more authority to weed out illegal smoke shops. He also commended reading initiatives that she outlined and a plan to limit hospitals’ ability to go after low-income patients for medical debt. 

Adams also addressed the elephant in the room – the lack of any real discussion of the migrant crisis – in both his statement and a press gaggle held in Albany. “We all know the asylum-seeker issue is impacting all of our communities, and we’re looking forward to (hearing) how we’re going to have some real budgetary response to that,” he said in the press gaggle. But Adams insisted that he wasn’t disappointed that Hochul didn’t spend much time at all discussing asylum-seekers on Tuesday, saying he’s confident about her addressing it in her budget speech next week.

While some of Hochul’s statewide initiatives could bring resources to New York City as well – such as funding to combat maternal health disparities and creating more psychiatric inpatient beds – here are some of the proposals that directly concern the five boroughs.

Tax breaks for housing production and building flexibility

Hochul will again push for a replacement to the expired 421-a tax credit for housing developers after failing to secure it in previous sessions. Both the governor and Adams have argued that without this kind of tax abatement program, which requires the construction of some affordable units, New York City will not be able to meet the level of housing demand. Though details are not included, a replacement for 421-a would need to include requirements for some level of below-market units and wage standards for workers, according to Hochul’s plan.

In addition to replacing 421-a, Hochul will also push for the completion deadline under the old 421-a program to be extended so that projects started under that program but not yet completed can still receive its tax benefits.

The governor’s proposal also includes several tools that Adams has advocated for to allow more flexibility in how and where housing can be built in New York City. Hochul will back the mayor’s asks to remove a restriction on how densely residential development can be built and support an (as of yet undetailed) tax incentive to spur commercial to residential building conversions with some level of below-market units. Hochul will also back the mayor’s request for a path to legalizing basement and cellar apartments that are out of safety code or completely illegal. 

Second Ave. Subway extension

Hochul endorsed moving forward with the evaluation, scope and planning for the Second Ave. subway’s “potential next destination” – a crosstown rail connection along the heavily-trafficked 125th Street in Harlem. The Metropolitan Transportation Authority will examine the possible extension of the Q line across 125th St. with stops at Lenox Avenue, St. Nicholas Avenue and ending at Broadway, which would connect East Harlem, Central Harlem and Manhattanville. 

The extension is expected to benefit straphangers from adjacent neighborhoods, as well as riders coming from upper Manhattan and the Bronx. The crosstown service would be a key connector for more than a half dozen existing subway lines, along with already high-ridership bus routes, serving as many as 240,000 daily customers. Hochul wants the extension planned as a continuation of the second phase of tunneling work currently underway for the Second Avenue subway. That would mean continuing tunnel boring machine work westward to save on time and costs, estimated at over $400 million when compared to doing the same work at a later date. 

Interborough Express

After initiating an environmental review and completing a planning study, the MTA will next move forward with the formal design and engineering of the Interborough Express. The proposed light rail service would connect Brooklyn and Queens with 17 transit stations along already existing railroad tracks. Known as the IBX, the service is expected to benefit as many as 900,000 residents between the two boroughs. 

Cracking down on illegal pot shops

Hochul didn’t mention Rajkumar’s legislation that would give municipalities the authority to shut down illegal pot shops, but she does plan to advance legislation that would strengthen the state Office of Cannabis Management’s enforcement ability – as well as that of local municipalities – to “seal or padlock an unlicensed cannabis business,” according to the State of the State book. Exactly how much leverage New York City would gain through that is unclear.

Climate resilience and flood mitigation

Following a year of extreme – and unprecedented – weather events, New York City could directly benefit from a few resiliency proposals in Hochul’s State of the State. Hochul proposed a “Blue Buffers” buyout program for property owners in flood-prone areas to help limit expenses in areas with repeated flooding and clear the way for flood mitigation and resilience projects on shorelines. While the program doesn’t mention New York City specifically, the city’s flood-prone shorelines and neighborhoods could be eligible. Hochul also outlined ways that the state could more directly participate in the localities’ resiliency work, including by supplying tools like generators, pumps and flood barrier technology. Details on how far that would go are short in the State of the State book, but the conversation is well-timed, as New York City is expected to experience heavy rain and possible flooding later today.

Investing in municipal pools

Hochul’s hefty State of the State plan also included an initiative that she previewed alongside Adams last week to direct funding to municipalities to renovate and build pools in high-need neighborhoods, as well as develop so-called “floating pools” like the planned Plus Pool in the East River. The state will also invest $12 million in an effort to get that project open for testing by this summer. 

Support for CUNY (and SUNY) students

Hochul’s address did include several initiatives that could benefit City University of New York – and State University of New York – students. One would allow automatic admission to CUNY and SUNY schools for high school graduates in the top 10% of their classes. Another would increase outreach to ensure students eligible for the Supplemental Nutrition Assistance Program are enrolled and able to receive those benefits.