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Gov. Kathy Hochul set to release her budget plan Wednesday

Hochul shaking hands in a candid photo, surrounded by people clapping
Don Pollard
Office of Gov. Kathy Hochul
Gov. Kathy Hochul greets state lawmakers at her State of the State address on Jan. 10, 2023.

New York Gov. Kathy Hochul will introduce her state budget proposal on Wednesday, and it’s expected to include details of plans she laid out earlier this month in her State of the State message.

In that speech, Hochul pledged to build 800,000 new housing units over the next 10 years and spend $1 billion on mental health services, including 1,000 more inpatient beds in psychiatric centers and 3,500 community-based residential beds.

“Fixing New York state’s mental health care system is essential and long overdue,” Hochul told a receptive audience of state lawmakers on Jan. 10.

She’s also committed to spend billions more on New York’s poorest schools to fulfill the terms of a court order that determined the state was unconstitutionally underfunding education.

The housing program would be financed mostly by private developers. Hochul is trying to revive a tax break for construction projects that include affordable housing.

But state revenues would have to pay for the other plans at a time when there are concerns about the economy and a possible recession. That could affect the financial picture of a state that is dependent on Wall Street for a significant portion of its tax collections.

Patrick Orecki with the watchdog group Citizens Budget Commission said New York can no longer rely on additional money it received from pandemic-related relief programs. He said while the state’s books are balanced right now, New York faces a “fiscal cliff” of larger deficits in a few years if spending patterns don’t change, and he urged the governor and lawmakers to plan for that.

“In two years’ time, the gap is less than $2 billion. But when we're talking four years from now, it's almost $6 billion as a current projected gap,” Orecki said.

He said if a recession does occur, the future gaps could be even larger. His group is urging the governor to put more money in a reserve fund to guard against a potential economic downturn.

“Building further rainy-day deposits is a big priority, we think,” Orecki said.

Governors in New York have significant leverage over the state Legislature in the budget process, so they often add on unrelated policy items that might otherwise be difficult to win approval.

This year, Hochul will be including in her budget plan a change to the state’s controversial 2019 bail reform laws, which ended cash bail for most nonviolent crimes. Democratic lawmakers have been resistant to changing those laws.

Hochul's proposal would allow judges to have more leeway to set bail for serious crimes by eliminating a requirement that they use the “least restrictive means” to ensure that someone returns for court dates. The governor, speaking earlier in January, said the revision would fix changes made to the law last year, which have created some confusion.

“We have an inconsistency in the law right now,” Hochul said.

The governor is also expected to add funding to help district attorneys carry out recently changed discovery laws that give defendants more access to evidence gathered in their cases.

The budget season begins amid heightened tensions between Hochul and her fellow Democrats, who hold supermajorities in the Legislature.

The governor is annoyed over a Senate committee’s rejection of her nominee for chief judge, and she still hasn’t ruled out a lawsuit to try to force a full Senate vote.

And Hochul on Monday vetoed a bill updating the state’s wrongful death statute that both houses of the Legislature had overwhelmingly passed. That angered the measure’s sponsors, who called Hochul’s last-minute attempts to negotiate changes to the bill “half-baked.”

Senate Leader Andrea Stewart-Cousins said despite the differences, the majority of Senate Democrats are on the same page as Hochul when it comes to the policies she will be proposing in the budget, and she won’t let those differences stand in the way.

“I have a good relationship with the governor,” Stewart-Cousins said. “We could disagree, but that doesn’t mean that we can’t do the work that the people sent us to do.”

Stewart-Cousins and other lawmakers will have a chance to do just that. Legislative hearings on the governor’s budget plan will start in a few days.

Karen DeWitt is Capitol Bureau chief for the New York Public News Network, composed of a dozen newsrooms across the state. She has covered state government and politics for the network since 1990.