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Hochul announces NY budget deal: 5 things to know

Jon Campbell

Published Apr 7, 2022

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New York Gov. Kathy Hochul speaks during a Covid-19 press conference in February.

Dia Dipasupil/Getty Images

Jon Campbell

Published Apr 7, 2022

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New York Gov. Kathy Hochul announced a state budget deal on Thursday that will make changes to the state’s cash bail system, legalize to-go cocktails at restaurants and relax the state’s gas tax for much of the rest of the year.

The Democrat-led state Legislature met in private all day to discuss the details of the $220 billion spending plan, which Hochul hashed out with legislative leaders. If rank-and-file members sign off, it would end a stalemate that lingered since the state began its fiscal year April 1 without a budget in place.

The budget would represent an $8 billion increase over the previous fiscal year and $4 billion more than what Hochul originally proposed, a hike fueled by higher-than-expected tax revenues and an infusion of federal cash from the various COVID relief packages.

The emerging agreement comes after Hochul twice shook up negotiations in mere days before the budget deadline, first by insisting on measures to scale back some of the state’s 2019 criminal justice reforms and then by striking a deal to build a new, $1.4 billion stadium for the Buffalo Bills, of which $850 million will be publicly subsidized.

In the end, both issues will remain in the final spending plan, though the exact details remain to be seen. As of early Thursday afternoon, the Legislature had printed two of the 10 bills needed to approve the budget, with more expected to come later in the day so long as rank-and-file lawmakers sign off.

"It is balanced and it pairs a bold vision with a fiscally responsible approach," Hochul said during a Capitol press conference touting the deal.

Assembly and Senate Democrats were still discussing the plan in private Thursday evening. But Senate Majority Leader Andrea Stewart-Cousins, a Yonkers Democrat, said she expects voting to begin late Thursday and carry into Friday.

Here are five things to know about New York state’s emerging budget agreement, which – if approved – would run through March 31, 2023:

1) Changes to criminal justice reforms, including bail

Hochul first laid out her budget proposal in mid-January. But it wasn’t until March 17th – two weeks before a final spending plan was due – that she sent lawmakers a 10-point public safety plan and inserted it into budget talks.

It went on to become the main sticking point that helped push budget talks into overtime, with progressive lawmakers furious that the governor was looking to roll back recent, Democrat-won reforms to the state’s bail and evidence discovery laws. But in the end, Hochul and legislative leaders worked to find a compromise that touches on most of the issues the governor raised in her plan.

The exact details have not yet been released. But Hochul said it will may key changes to the state's bail and evidence discovery laws — both of which had been reformed by Democratic lawmakers in 2019 and hailed as key wins for the progressive movement.

On bail, Hochul said judges would be given more discretion to weigh whether a defendant has a history with guns or has violated an order of protection when considering bail. She also said it would add certain gun crimes to the list of offenses that are bail-eligible.

The budget agreement is also expected to include a five-year extension of Kendra's Law — which allows courts to order someone into mental health treatment — while giving judges more leeway to mandate a second course of treatment if the person experiences a "substantial increase" in symptoms.

The budget agreement will also make it easier to charge someone with illegal gun trafficking by lowering the number of unlicensed firearms needed to draw the charge, Hochul said.

Assemblymember Latrice Walker, a Brooklyn Democrat, was one of the architects of the 2019 reforms that ended cash bail for most misdemeanors and non-violent felonies. She launched a hunger strike in an effort to block Hochul’s proposals.

In a statement Tuesday, Walker said the latest changes will “roll back progress the state has made toward ending the criminalization of poverty.”

“Now more than ever, it’s critical that we do not allow political distractions to undermine effective, evidence-based policy,” she said. “Putting forward the wrong solutions won’t get us the right results.”

2) Gas-tax holiday through December 31st

Hochul and legislative leaders have agreed on a measure reducing the state’s gas taxes by about 16 cents per gallon from June 1st through the end of the year.

The budget language would nearly halve the state’s 33-cent share of per-gallon taxes in an attempt to provide relief at the gas pump amid sky-high prices. As of Thursday, the average price of a gallon of gas was $4.26, according to AAA.

Under the deal, gas retailers and distributors would be required to pass the tax savings on to consumers and not increase their prices in response. The state would also reimburse the MTA and the state’s highway and bridge fund for the amount of revenue they would otherwise lose from the tax cut.

3) Three years of to-go drinks

After a 15-month, pandemic-era experiment that allowed bars and restaurants to serve cocktails and similar alcoholic beverages with to-go orders, Hochul made clear she wanted to make it permanent.

In the end, restaurants will be able to serve to-go drinks for the next three years, by which time lawmakers will have to decide whether to extend it. Restaurants won’t be able to sell full bottles of liquor, which liquor stores had raised as a major concern. And customers will have to buy a “substantial food item” with any take-out alcohol purchase.

What is a “substantial food item”? The budget language doesn’t explicitly say, opening the door to debates of which foods are and aren’t “substantial.” (In 2020, when then-Gov. Andrew Cuomo required a food purchase with any alcoholic beverage, some restaurants began selling $1 “Cuomo Chips” in an attempt to subvert it.)

Scott Wexler, executive director of the Empire State Restaurant & Tavern Association, hailed the agreement.

“Allowing restaurants and taverns to sell drinks to go will help our members and their employees earn a little extra revenue,” he said in a statement. “It also provides the public with a convenience that proved extremely popular, and which they’ve come to expect in today’s modern world.”

Liquor stores had led the opposition to takeout cocktails. They won’t go home empty handed: The budget language will allow them to open their stores on Christmas Day, which had long been prohibited by the state’s pandemic-era laws regulating the alcohol industry. And the budget will also launch a commission to study ways to improve the alcoholic beverage control law.

4) Taxpayers to largely fund new Buffalo Bills stadium

In late March, Hochul agreed to pay $600 million to construct a new stadium for the Buffalo Bills, along with at least another $250 million spread out over 30 years to help with maintenance and upkeep. Under the deal, Erie County – the stadium’s home county – would chip in $250 million, making it the highest publicly financed project ever for an NFL facility.

But the state’s share requires approval from state lawmakers. And despite significant pushback from New York City lawmakers, that funding is expected to be approved in the budget, Hochul said.

Hochul said much of the funding will come from a settlement fund from the Seneca Nation, the western New York tribe that operates casinos in the region and had been locked in a longstanding dispute over the state's share of revenue. Nation leaders accused Hochul's administration of freezing their bank accounts in an attempt to get them to fork over the money, much of which is now going toward the Bills stadium.

5) Two major NYC issues get the boot

Lawmakers – especially those in the Assembly – made a concerted effort to remove Hochul’s policy proposals from the state budget if they had little or nothing to do with the state’s finances. They were unsuccessful when it came to criminal justice reform.

But they did succeed when it came to two major New York City issues: mayoral control of the school system, and a soon-to-expire tax break for housing developers.

Hochul sought a four-year extension of mayoral control, which puts the school system under the authority of the New York City mayor’s office, a policy that’s been passed since the early 2000s. It’s set to expire in June. But lawmakers had signaled for weeks that they were likely to punt the issue from the budget, and they followed through.

The same thing happened to the tax break known as 421-a, which allows developers to claim a tax exemption on multi-unit housing properties so long as they build a portion of affordable units. The break is set to expire in June, and Hochul was looking to tweak, extend and rebrand it as 485-w.

Hochul had been pushing for a one-year extension as recently as late last week, according to lawmakers. But it didn’t end up in the final agreement.

Now, both issues will be decided in the final two months of the Legislature’s 2022 scheduled session, which is set to end in early June.

"My members had said a while ago that they wanted to have a moment with mayoral control," Stewart-Cousins told reporters. "It's just a process, because there were so many things that were going on, that we knew we could do outside the budget."

This article has been updated to include comments from the governor and more details on the budget.

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Jon Campbell

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Jon Campbell covers the New York State Capitol for WNYC and Gothamist. Prior to that, he covered the Capitol for more than a decade for the USA TODAY Network. He has twice earned the Walter T. Brown Memorial Award, an honor given annually by the Legislative Correspondents Association alumni for outstanding state government coverage. Jon grew up in the Buffalo area and graduated from the University at Albany. Got a tip? Email Jon at [email protected] or Signal at JonCampbellNY.90.

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