Gov. Kathy Hochul on Tuesday unveiled a $233 billion budget for New York State that includes $2.4 billion to help New York City manage its migrant crisis — a $500 million increase reflecting the mounting costs as immigrants continue to arrive.
The budget proposal sought to thread the needle between the necessity to exert financial discipline as projected multibillion-dollar deficits loom, and the pressing needs posed by the migrant situation as well as substantial increases in Medicaid costs.
The presentation built on the State of the State address that Ms. Hochul gave last week, in which she outlined a broad vision for bolstering mental health care and public safety across the state, but spoke only briefly about the migrant crisis.
The issue took center stage on Tuesday, with the governor offering a package that will help cover the costs of sheltering migrants and asylum seekers, as well as provide funds for case management, National Guard staffing, medical and legal bills, and employment-related services.
Under Ms. Hochul’s proposal, New York State will take over funding for roughly 3,000 beds, fully covering the cost of existing shelters at Creedmoor, the state psychiatric hospital in Queens, and at Randall’s Island. This will come on top of the state’s pledge to fund a 2,000-bed shelter at Floyd Bennett Field in Brooklyn.
New York’s commitment, which comes as the state faces likely reductions in other areas, speaks to the political urgency of the crisis for Democrats, who will be forced to defend their party’s handling of immigration in a presidential election year.
Looming increases to Medicaid will require the state to spend an additional $3 billion in related costs this year. Enrollment is up on state-subsidized plans, accounting for roughly $400 million in new costs. On top of that, the state is still awaiting the repayment of a $1.5 billion loan it made to distressed regional hospitals amid the coronavirus pandemic.
“We’ve been left hanging,” Ms. Hochul told reporters and officials gathered in the Capitol’s stately Red Room.
The state will be aided by a revised projection that finds higher revenues resulting in a $2.2 billion surplus. As such, the governor’s proposal struck some as austere; the progressive Fiscal Policy Institute characterized the budget as “modest” and said that it lacked “the deep investments needed to reverse New York’s affordability crisis and stem the state’s population loss.”
But Ms. Hochul, perhaps in anticipation of such criticism, said she knew it was “a lot more pleasant to say yes to everybody, but now the reality of the economy requires us to make the tough decisions.” And she once again held the line, rejecting calls for new income taxes.
The budget proposal officially kicked off the annual negotiations between the governor and legislative leaders over how the state will spend over $230 billion throughout the 2025 fiscal year, which begins April 1. And while the governor and the leaders of the Senate and Assembly are all Democrats, there will be no shortage of items to haggle over, with education at the forefront.
The governor voiced her support for extending Mayor Eric Adams’s control of New York City public schools by four additional years — twice as long as the current two-year period of control.
Ms. Hochul is also proposing to end the decades-old practice, known today as “hold harmless,” that ensures that school districts never receive less money in one year than they did the previous year.
While the proposed budget would boost overall school aid by $825 million — or 2.4 percent — the increase is significantly smaller than those in recent years and would result in certain districts receiving less money than they did last year, in part because much of those funds came from a one-time federal infusion tied to Covid recovery.
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