New York lawmakers finally finished passing a state budget Wednesday night that softens the state’s climate change goals, limits local police from cooperating with federal immigration authorities and sprinkles cash across the state to cities struggling with their own financial woes.
The $268.5 billion spending plan will allow Gov. Kathy Hochul, a Democrat, to claim a series of legislative victories as she runs for reelection this year. She convinced most Democratic lawmakers, despite their misgivings, to support a rollback of the climate law and several of her other priorities, which she painted as key affordability measures.
But the process of crafting the budget was anything but efficient. The final votes were cast eight weeks after the budget was due, making it the tardiest spending plan since 2010, when negotiations stretched well into the summer.
Lawmakers have laid the blame for the lateness with Hochul, saying her insistence on including non-fiscal policy measures in the budget has made it late each year she’s been in office. Hochul pointed back at the Legislature, noting she first proposed her budget five months ago.
“ I would’ve been happy to be done earlier,” Hochul told reporters Wednesday. “I laid out my priorities in January. …. I don’t set the timetable on how long it takes for the Legislature to understand this is my priority and I want to get this done.”
The final budget eliminates a previous mandate that New York cut its greenhouse-gas emissions 40% by 2030, which Hochul said would have increased costs for consumers. That mark will now be replaced by a softer goal of a 60% cut by 2040 — along with changes to the state’s accounting methods that will instantly put it on track to meet the new target.
The rollbacks enraged environmental advocacy groups but won cheers from business groups — and Republicans, too. Assembly Minority Leader Ed Ra praised Hochul for the changes and for delaying a mandate for school districts to convert their bus fleets to electric vehicles .
“Even though we’re not happy with the overall budget, it obviously includes some of our priorities,” Ra said. “Those changes were things that we pushed very hard for.”
Hochul was also able to convince the Legislature to support changes to the state’s car-insurance laws, curtailing payouts to people found mostly responsible for a wreck despite strenuous objections from the state’s trial lawyers. Uber, the ride-hailing company that stands to see its insurance bills reduced, put millions of dollars behind the lobbying effort.
The governor is hoping the changes will lead to lower rates for drivers, which comes as both she and her Republican opponent, Nassau County Executive Bruce Blakeman, are centering their political campaigns on driving down costs for New Yorkers.
“ I would not have taken on this fight if I didn’t feel confident, based on what has happened in other states like Florida, that there will be a reduction in insurance premiums,” the governor said. “And the insurance companies know that is our expectation.”
Earlier this month, Blakeman faulted Hochul for failing to get a budget passed on time despite Democrats dominating both houses of the Legislature.
“ Kathy Hochul’s the leader of the Democratic Party,” he said. “Her party has a majority in the Senate and the Assembly, and she can’t get a budget passed. That shows a terrible lack of leadership on her part.”
The Legislature approved the 10 bills that make up the budget, but not without significant consternation from some lawmakers who were troubled by some of Hochul’s priorities. Given the wide-ranging nature of the legislation, many lawmakers ultimately supported bills that had a mix of measures they opposed and embraced.
Assemblymember Diana Moreno, a Queens Democrat, said the budget process feels “completely divorced from the lived reality of my constituents,” who she said support raising income taxes on the state’s highest earners. She voted against the budget’s revenue bill, which includes tax measures.
“ We have watched our executive co-opt the language of affordability and our budget process to insert her own policy priorities of auto insurance, industry giveaways and climate-law rollbacks while ignoring the vast majority of New Yorkers who wanted to increase taxes on the ultra-wealthy,” she said.
Other left-leaning Democrats wanted Hochul to go further on limiting local police from cooperating with U.S. Immigration and Customs Enforcement. The budget bans formal agreements between police agencies and ICE, which are known as 287(g) agreements. But it stops short of prohibiting informal cooperation between federal and local officers.
Along with Hochul, New York City Mayor Zohran Mamdani was also able to claim major wins.
He leaned on Hochul and state legislators to help him close a $5.4 billion city budget deficit, which they did in part by providing more than $1.5 billion in additional funding and allowing the city to defer its payments to the pension system — a move decried by some budget watchdogs.
Hochul and lawmakers also got on board with a tax on non-primary residences in New York City that are worth millions of dollars. The so-called pied-a-terre tax is expected to generate $500 million a year for the city — all while allowing Mamdani to paint it as a tax on the wealthy that delivers on one of his biggest campaign promises.
The governor and legislative leaders also considered a tax on homes purchased in New York City with all cash, but it fell out of negotiations at the last minute after Assembly Speaker Carl Heastie signaled it was likely to be part of a final deal.
Better-than-expected returns on Wall Street let Hochul and lawmakers dole out cash all around the state.
School districts all saw their state aid rise by at least 2%. County governments got an additional $50 million to help pay for enhanced 911 systems. And individual cities in fiscal straits got bailout packages to balance their budgets. Buffalo received an extra $55 million. Albany and Yonkers got $40 million. Rochester and Syracuse were appropriated $20 million.
“There is a strong recognition that upstate cities are struggling financially,” said Assemblymember John McDonald, an Albany County Democrat and former mayor of the city of Cohoes. “Regardless of the reasons it is critical that the state step up to support the cities as additional support will help minimize future [local] tax increases and help maintain services that citizens value and expect.”
The final budget does not provide relief for the 450,000 New Yorkers who are expecting to lose public health insurance through the state’s Essential Plan this summer because of federal cuts. Hochul remained unmoved in recent weeks by the last-minute pleas of some Democratic lawmakers to preserve that coverage using state funds, laying the blame with Congressional Republicans who passed legislation to reduce healthcare spending last year.
But the budget does include substantial boosts in Medicaid funding for hospitals and other healthcare providers, which industry leaders say will help ease the pain of federal losses.
“That stability will help ensure that New Yorkers continue to have access to high-quality care,” Kenneth Raske, president of the Greater New York Hospital Association, said of the financial boost.
Public-sector unions also won big. After a monthslong campaign, lawmakers approved $551 million of improvements to retirement benefits for workers hired after 2012.
Assemblymember Michael Fitzpatrick, a Suffolk County Republican, voted against those changes. But he said the measure’s success reflected the influence of labor groups – particularly in an election year.
“We all understand politics,” Fitzpatrick said. “The unions, number one, they’re a business.”
New York State AFL-CIO President Mario Cilento, who helped negotiate with Hochul on the pension deal, took a victory lap.
“This demonstrates what the union movement can achieve when we stand together and raise our voices to improve the quality of life for all working people,” he said.
Includes reporting by Caroline Lewis and Samuel King
