NEW YORK - Governor Kathy Hochul is proposing a $227 billion dollar budget for the next fiscal year – that’s a more than $5 billion increase from the previous year.
"We will not be raising income taxes," Hochul said to kick off her budget proposal. "Because it’s not a newsflash that New Yorkers already believe they pay too much."
But just like that, Hochul teed up her two-month budget war with state lawmakers – many of whom want to see an increased tax on the ultra-wealthy.
However, this isn’t the only battle Hochul is going to face before the budget is due on April 1.
Hochul wants to create a new revenue stream for the MTA that would keep massive service cuts and layoffs from going into effect.
"We have to face the harsh reality of MTA’s fiscal cliff," Hochul said.
To offset this budget gap, Hochul is proposing a hike on the MTA payroll tax for New York City companies and would direct revenue from new casinos in the city towards funding the MTA.
However, even if this is approved, the MTA will still be moving forward with its 5.5% fare hikes this year.
There are legal snags in Hochul’s plan, under current state law, casino revenue is flagged for educational purposes, but MTA Chair Janno Lieber says businesses should be responsible for funding MTA service.
"We need them to pay a little slice of the cost of maintaining five days a week service when people are only coming in 2-4 days," Lieber said. "That's the rationale."
Hochul wants to eliminate the regional cap on charter schools, which would allow more charter schools to open in the city.
Per pupil funding for charter schools would increase by 4.5%.
"What we're trying to do is something that is just common sense," Hochul explained.
However, this already is kicking off a fierce fight with the state’s powerful Teacher’s Union.
In a statement, NYSUT President Andy Pallottaq said, "This will have a devastating impact on our public schools, especially for our state’s most underserved students. History shows that the corporate charter school industry is interested in making profits, not in the well-being of all students, educators, and families."
Hochul is also proposing a $3.1 billion or a 10% increase to annual School Aid, the largest School Aid increase in history, for a total of $34.5 billion.
This includes fully funding the Foundation Aid formula for the first time in its 17-year history.
NY Migrant Crisis:
Hochul is proposing to direct $1 billion in state aid to fund resettlement costs for migrants. This includes reimbursing the city for a share of shelter and relief centers, health care costs and National Guard members who have been assisting with this crisis.
Hochul also wants to set up a future funding formula so that costs are split evenly between the city, state, and federal government.
However, the federal government still has not committed to providing resources to aid in the migrant crisis.
Hochul said she spoke with the President on Wednesday.
"He did say that there be money coming from the federal government to help the city," Hochul said. He did not give a number, but we believe that they should be picking up a significant share."
NY Corporate Taxes:
Despite promising no new taxes, Hochul does want to extend a higher tax rate for wealthy corporations.
Former Governor Andrew Cuomo increased the tax rate for corporations taking in at least $5 million a year in revenue from 6.5% to 7.25% in 2021.
That three-year tax hike was meant to be temporary and set to expire at the end of this year.
But Hochul is proposing extending that for at least another 3 years.
Some lawmakers would like to see this tax hike made permanent.
NY Mental Illness Help:
Hochul wants to direct $890 million in capital to build 2,150 new residential beds for people with mental illness who need varying levels of support.
Hochul also wants to set aside $18 million in capital funding to open 150 State-operated inpatient psychiatric beds
Hochul wants to spend $40 million in additional funding to hire hundreds of new prosecutors around the state and direct $20 million for pretrial services.
Hochul also wants to remove the "least restrictive means" standard from the state’s bail laws so that judges can have more discretion when setting bail.
This has been met with strong pushback in the past by Democratic state lawmakers but some recently have expressed that they are willing to work with Hochul on certain changes.