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NY has a tentative state budget deal. Here’s what’s in and what’s out.
By
Giulia Heyward
and
Jon Campbell
Published Apr 27, 2023
Modified Apr 27, 2023
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Photo by Lev Radin/Pacific Press/LightRocket via Getty Images
By
Giulia Heyward
and
Jon Campbell
Published Apr 27, 2023
Modified Apr 27, 2023
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New York Gov. Kathy Hochul said she reached a tentative deal with lawmakers on a state budget that will increase the minimum wage, bail out the cash-strapped Metropolitan Transportation Authority and clear the way for more charter schools in New York City.
After months of negotiations and five separate extensions, the Democratic governor and the Democrat-controlled Legislature agreed to a “conceptual” deal on a $229 billion spending plan that, once passed, will be more than four weeks late. It will also include a number of policy measures that have little to do with money — some of which stalled negotiations for weeks, including one making it easier for judges to set bail in serious criminal cases.
"I know this budget process has taken a little extra time, but our commitment to the future of New York was driving this," Hochul said Thursday night in the state Capitol's Red Room.
The negotiating logjam began to break late last week when Hochul stopped pushing her much-debated housing plan in budget talks, choosing to drop her proposals — which she said would have created 800,000 new units over the next decade — rather than reel them in to appease lawmakers.
The budget had been due prior to the April 1 start of the state’s fiscal year. Hochul said voting is expected to begin in the coming days, which would make it the latest state budget since 2010, when lawmakers didn’t approve a spending plan until August.
The budget bills haven’t yet been printed. But here’s what we know so far about what’s in — and what’s out — of the final agreement.
Minimum wage set to increase and keep increasing
The hourly minimum wage — currently $15 in New York City, Long Island and Westchester County — is set to increase. And continue increasing, assuming inflation.
As part of the budget, lawmakers and Hochul have agreed to increase the minimum wage by 50 cents a year beginning next year until it hits $17. (For areas north of Westchester County, where the minimum wage is currently $14.20, it will bump up by 80 cents next year, then 50 cents a year until it hits $16.)
After that, the wage will be tied to inflation — meaning it will automatically increase in line with the Consumer Price Index, rather than be subject to the whims of state lawmakers.
That’s a compromise, of sorts, between Hochul — who simply wanted to index the wage to inflation, not provide a more-immediate increase — and lawmakers who were looking for a bigger increase. Some lawmakers weren’t happy, however, including Sen. Jessica Ramos, a Queens Democrat who sponsors legislation to increase the wage to $21.25 by 2026.
“While I am glad the conversation we started led to a wage increase for New York’s working families, I cannot hide my disappointment that the catch-up is so meager," Ramos said in a statement. "We have to take the war on poverty more seriously."
MTA bailout will cut planned fare hike; launch free bus pilot
With the MTA facing a significant budget hole, the tentative deal includes a bailout package that will require the state, city and city businesses to chip in more. It'll also help reduce a scheduled 5.5% fare hike to 4%, according to the governor's office.
Under the deal, the state will chip in $300 million (plus an extra $65 million to decrease the fare hike), while New York City will have to put in $165 million to help cover the authority's paratransit costs. That's less than the $500 million a year Hochul sought in her initial budget proposal.
The budget agreement would also nearly double the MTA payroll tax for New York City's largest businesses, a move expected to pull in more than $1 billion a year for the transit system.
Lawmakers, meanwhile, were able to secure funding for a pilot program for free bus routes. Under the pilot, the MTA will make one bus route in each borough free for a two-year period. It'll be up to the MTA to decide which routes, according to Hochul.
NY judges get more discretion to set bail
For the second budget in a row, Hochul insisted on making changes to the state’s bail-reform laws. It was partially responsible for how long it took everyone to reach an overall deal.
The budget will eliminate the requirement that judges opt for the “least restrictive” standard when considering bail for those accused of violent felonies and certain high-level misdemeanor crimes, according to Hochul.
The change, Hochul argued, will make it clear to judges that they can set bail in serious cases.
"It gives judges discretion," Hochul said. "They need to hold violent criminals accountable while still upholding our commitment to a justice system that is fair and accessible to all."
Prosecutors and police were among those pushing for the change. The state’s bail laws also were a significant issue on the campaign trail last year, when Republican Lee Zeldin painted Hochul as soft on crime en route to a narrow loss in a deep-blue state.
Public defenders said the change rips at the heart of the state’s criminal-justice reforms, and will result in more people sitting in jail before ever being found guilty of a crime.
Democratic state lawmakers were reluctant to go along with Hochul’s plan – countering that it would lead to more low-income New Yorkers remaining in jail because they can’t afford to pay bail. Some remain incensed, including Assemblymember Latrice Walker, a Brooklyn Democrat who helped lead the push for the 2019 reforms and launched a hunger strike against Hochul’s proposed changes.
"The elimination of the least restrictive means standard with respect to bail would result in more Black, brown and poor people being detained pretrial," Walker said in a statement. "This would not make New Yorkers safer. It would fracture families and communities – and override legal precedent that dates back to the civil rights era."
NY’s $5.35 cigarette tax will be the highest in the nation
The state’s cigarette tax will jump $1 to $5.35, making it the highest per pack tax in the country. But the budget won’t ban all flavored tobacco, including menthol, which Hochul had originally proposed before meeting pushback from some Black leaders.
“We'll make sure the tax is in there to discourage the use,” Hochul said Tuesday.
While Hochul’s administration argued that the tax hike will discourage more young people from becoming habitual smokers, others aren’t as supportive. Convenience store and bodega owners claim that it’ll hurt sales and bolster the black market for these tobacco products.
The measure is actually projected to result in a small hit to the state’s bottom line. With fewer sales of tobacco products, New York could miss out on an estimated $22 million a year.
New York City to revive 14 “zombie” charter schools
In her original budget proposal, Hochul wanted to clear the way to open roughly 100 new charter schools in New York City — in large part by removing the city’s regional cap of 275 charters, which it already reached.
In the end, Hochul and lawmakers agreed to 14 — not by removing the cap, but by reviving so-called “zombie” charters that were originally awarded to schools that have since closed or never opened in the first place.
Democratic lawmakers resisted any expansion of charter schools, as did the state, city and national teachers unions, who said they restrict funding to public schools by biting into their enrollment. Charter school proponents said they give parents more choice when it comes to their child’s education.
Not included: Hochul’s housing plan (or tenant protections)
Hochul had made her housing plan a central piece of her original budget proposal. Its centerpiece was a measure requiring communities to hit annual growth targets, or risk facing the state taking over approvals for multi-family housing complexes. In early April, Hochul said any budget had to “make progress” on the rising cost of housing.
In the end, she dropped her housing proposals entirely — rather than accept a compromise that, in her view, would have watered down the plan’s effectiveness.
"I believe major action is required to meet the scale of this crisis," Hochul said Thursday. "The legislature saw it differently. They're not ready to commit to the kind of transformative change I proposed."
Lawmakers were pushing for more cash incentives for municipalities that create housing, rather than threatening them with a loss of local approval for falling short.
Since Hochul pulled all housing policy from the budget, that helped crush talks of boosting protections for tenants. Some Democrats were pushing for “good cause eviction” protections, which would limit annual rent increases and prevent landlords from evicting tenants without a bona fide reason.
What happens next?
Hochul said she and the legislative leaders have reached consensus on the major issues that will be and won't be included in the final budget. But she acknowledged there are still some finer details to work through, though she said budget bills will soon be printed.
From there, lawmakers will put the bills to a vote, a lengthy process that requires hours of debate. Voting is expected to begin early next week.
"The major decisions have been made," Hochul said. "There's obviously fine tuning that has to be done. That'll be worked out over the weekend."
Assembly Speaker Carl Heastie, D-Bronx, confirmed the "conceptual agreement" in a statement of his own.
"While there are still some issues we need to discuss with our members, I am confident we will pass a budget that meets our goals to make New York more affordable and place our state on a strong path forward," he said.
The article has been updated with additional details on the "conceptual" budget deal and comments from state lawmakers.
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Giulia Heyward
Giulia Heyward is a breaking news reporter on the Day-Of desk. She previously worked at NPR, as a breaking news reporter, and the New York Times, as a reporting fellow on the national desk. Her work has also appeared in CNN, The Atlantic and Politico. Got a tip? Email [email protected] or more securely on signal at 917-715-1458.
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Jon Campbell
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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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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