Lawmakers Setting the Stage for Contentious Budget Negotiations
New York democrats released their 2023-2024 budget proposal last week but a number of Governor Kathy Hochul’s initiatives were missing or modified, signaling we may be in for a rocky ride towards an agreement this year.
The deadline for a budget agreement is April 1st and so far democrats, who control the state Assembly and Senate appear to be out of step with Hochul on a number of her initiatives.
Hochul released her $227 billion budget plan last month. And stated she wanted to grow jobs and boost the economy.
Some of the major unresolved areas include issues around Taxes, minimum wage increases, bail reform, housing, fossil fuel and tobacco.
TAXES
Senate Democrats proposed a $236 billion budget—about $9 billion more than Hochul’s—and is anchored by tax increases on the wealthiest New Yorkers.
The Assembly’s plan, released separately on Tuesday totals $232.9 billion. Both plans agree on one thing, taxing the rich.
The plans would raise the personal income tax for New Yorkers earning $5million to $25 million from 10.3% to 10.8% and from 10.9% to 11.4% for those earning more than $25 million per year.
Hochul’s budget does not include any personal income tax increases and would continue reductions for middle-income earners making up to $323,200.
MINIMUM WAGE
New York law already requires employers outside New York City to raise the minimum wage to $15 per hour by 2025.
Hoclul’s plan is to require 3% increases after 2025 or increases at the rate of inflation, whichever is lower.
The Senate supports inflationary increases but wants to boost the minimum wage to a “living wage” first. Some lawmakers proposed a $20 minimum wage increase starting in 2026.
The Assembly supports scheduled increases, then indexing to inflation.
BAIL REFORM
In 2019, New York passed sweeping bail reform prohibiting cash bail for most misdemeanors and felonies. The law forbade state judges from holding defendants based on their “perceived dangerousness”, and required them to use the “least restrictive means of ensuring defendants return to court”.
Portions of the law was almost immediately rolled back in 2020 after a firestorm of criticism state-wide from politicians and advocates representing both sides of the debate.
Hochul’s plan is on the side of giving judges greater discretion in setting bail; however, Changes to the bail laws were noticeably absent from both NY State and Assembly budgets. Lawmakers have said they want to be careful to not “criminalize poverty.”
HOUSING
Hochul’s plan is to force localities to hit housing growth targets and build 800,000 units of housing over the next decade.
State democrats disagree with that plan and instead, want to provide $500 million in incentives for local governments to hit growth goals.
FOSSIL FUELS
Hochul wants to ban the burning of fossil fuels in new construction within five years—by 2025 for small buildings and by 2028 for larger buildings. Additionally, she wants to ban the sale of new fossil-burning heating equipment in New York State by 2030 for small buildings and 2035 for larger ones.
The Senate and Assembly both agree on eliminating fossil-fuels but the Senate wants a more aggressive timeline for doing so.
TOBACCO
Hochul proposed a proposed $1-per-pack increased tax on cigarettes and wants to ban flavored tobacco and menthol cigarettes. House and Senate democrats agree on the cigarette tax but are rejecting the tobacco
ban.
