(The Center Square) — New York Gov. Kathy Hochul has rolled out a $252 billion budget that calls for tax cuts, expanded child credits and record spending on programs amid better-than-expected revenues.
Hochul’s executive proposal for the fiscal year that begins on April 1 is about $19 billion, or 8.3% larger, than last year’s spending plan and roughly $36 billion or 16% higher than her first budget three years ago. It’s the largest budget in state history.
The plan, which requires legislative approval, calls for $37.4 billion in state aid to public schools, up from the $35.9 billion approved in the previous fiscal year’s budget. The budget also includes $100 million for first-time homebuyers.
Hochul also wants to extend the state’s millionaires tax, which raises the tax rates for earners between $5 million and $25 million and those making over $25 million. It currently sunsets in 2027.
Hochul said the budget proposal reflects the state’s fiscal health with a better-than-expected economy, including strong profits by Wall Street firms. Last fall, state budget writers projected a nearly $1 billion deficit for the coming fiscal year.
The spending plan calls for tapping into surplus revenue for “affordability” measures, including $3 billion in “inflation rebate” checks for taxpayers, low- and middle-income tax cuts and an expanded child tax credit, among other proposals. It also calls for more money for Medicaid, a partially federally funded program that provides health care for low-income people.
But fiscal watchdogs have cautioned Hochul about overspending instead of squirreling away surplus tax revenue in the state’s rainy-day fund, arguing that spending on crucial programs could be jeopardized.
The Citizens Budget Commission, an independent watchdog group, said Hochul’s budget plan “weakens the State’s fiscal foundation and competitiveness: it balloons spending, fails to restrain unaffordable Medicaid and education spending growth, spreads many ‘affordability’ programs too thin to provide meaningful relief, and extends the ‘temporary’ income tax surcharge.”
“The budget continues New York’s habit of using revenue surges and temporary taxes to build its fiscal house of cards higher, which could create a self-inflicted fiscal crunch and weaken the State’s ability to meet New Yorkers’ needs during a future recession or in the face of potential federal cuts,” Andrew Rein, the commission’s executive director, said in a statement.
On policy matters, Hochul proposes a statewide “bell-to-bell” ban on smartphones and other electronic devices in public schools as part of her budget proposal.
“Every student will be required to disconnect from their devices during school hours, bell-to-bell. That means during class, at lunch, in the hallways,” she said in remarks on Tuesday. “Our kids will finally be free from the endless disruptions of social media and all the disruptions that come from it.”
Hochul’s spending proposal kicks off several weeks of negotiations with legislative leaders. It comes as she gears up to run for the election next year, with several challengers weighing a run for the top post.
Congressman Mike Lawler, a Hudson Valley Republican weighing a run for governor, blasted Hochul’s budget for “reckless” overspending and not doing enough to reduce the state’s high cost of living.
“We lead the nation in outmigration for a reason — highest tax burden, worst business climate, reckless spending, up over $90B since she took office, and a declining quality of life with out-of-control crime,” he posed on social media. “The state is hemorrhaging people and businesses and their response is to increase taxes and spending. Disaster!”