New York state is on track to spend $277 billion this year – nearly $9 billion more than what Gov. Kathy Hochul announced last month when she proclaimed a “general agreement” on the budget.
The total figure – revealed late Wednesday in a financial plan posted by the state’s budget division – shows spending has climbed almost 10% above the $254 billion figure enacted last year. The state begins its fiscal year on April 1.
Republicans and fiscal watchdogs said the higher spending is worrisome and called Hochul’s use of a lower figure misleading.
“It’s a sobering reminder of the reckless, irresponsible approach Albany takes when developing its annual spending plan,” Assembly Minority Leader Ed Ra, a Nassau County Republican, said in a statement. “Albany Democrats demanded a blank check from New York taxpayers and signed it in the dark.”
Budget division spokesperson Tim Ruffinen said in an email that most of the $9 billion increase reflected a plan to spend previously approved federal aid – which was sitting in a trust fund – to continue to provide subsidized health coverage to lawfully present immigrants.
New York is required under a 2001 state court decision to provide health insurance coverage to immigrants, though they aren’t eligible for federal matching funds under the Medicaid program. The state obtained a waiver from the federal government in April to use older funds to continue to subsidize many of those immigrants’ coverage through a different subsidized health plan.
“The updated All Funds number is a more accurate reflection that includes additional federal funding, a majority of which recently became eligible to spend,” Ruffinen said, referring to the $277 billion figure that includes spending of state tax dollars and federal aid.
Hochul, a Democrat, previously said her budget was “delivering on affordability, on safety, on childcare, on the environment and on housing.” But her announcement – during which she said the budget would run $268 billion – came before lawmakers had worked out details on a new pied-a-terre tax in New York City or a plan to sweeten public pension benefits.
In addition to the increase in all-funds spending, the new financial plan shows growing deficits, or gaps between what the government plans to spend and what it projects it will receive in taxes and federal aid.
The estimated deficit for the next three years increased by $3.8 billion to a combined $31.6 billion. That includes a $6.4 billion gap that lawmakers will need to close in the spring of 2027 if they hope to continue this year’s higher spending on aid to school districts, major cities and childcare subsidies.
Andrew Rein, president of the Citizens Budget Commission, a fiscal watchdog, said the state missed an opportunity this year to direct extra revenue to reserve funds. He also said higher spending for education – including increases in aid to school districts where enrollment is declining – wasn’t the best use of state resources.
“The state keeps on making choices that increase fiscal stress and risk a self-inflicted fiscal crisis,” Rein said.
The state budget is large and multifaceted. It’s approved in a total of 10 pieces of legislation, some of which allow spending by state agencies and authorize grants to programs or building projects. It also contains bills that set tax policy and rules for spending money.
This year, Hochul inserted other types of policies into some of the budget bills, including new rules designed to protect immigrants and a rollback of the state’s climate law. Negotiations over policy pushed the adoption of the budget nearly two months past its April 1 due date, lawmakers said.
The financial plan released Wednesday provides a comprehensive summary of the spending contained in all those bills. It tallies up how much money is appropriated and for what. Rein said it should be released to the public before state lawmakers vote on the bills so everyone has a clearer picture of what’s happening.
“The people deserve to know at that time of decision-making how their money is being spent, where the money goes, comes from, where it goes to, and what it means in the future,” Rein said. “Hiding the truth from them is not helpful.”
