New York's Budget Battle Begins
New York Gov. Kathy Hochul will seek to raise payroll taxes on downstate businesses and use revenue from new casinos to bolster mass transit in New York City as part of the state budget she proposed Wednesday.
As I reported in The Wall Street Journal, the Democratic governor is proposing an additional $1.3 billion a year for the Metropolitan Transportation Authority through the actions, her aides said. That includes a call for New York City to contribute roughly $500 million more to the authority, which operates subways, buses, and commuter railroads as well as bridges and tunnels. The MTA proposals would generate enough cash to help cover a budget gap caused by a loss in fare revenue from lower ridership since the Covid-19 pandemic began in 2020, officials said.
The governor’s budget also earmarks more than $1 billion to help New York City pay some of the cost of sheltering around 40,000 migrants who arrived in the city after illegally crossing into the U.S. Many are seeking asylum. New York City Mayor Eric Adams has been calling for the state and federal governments to shoulder some of the city’s costs. According to the Associated Press, President Joe Biden assured Hochul there would be federal money to help the city, though she said “he did not give a number.”
The state projected it would finish the current budget year — which ends on March 31 — with an $8.7 billion surplus, half of which Hochul plans to put in reserve. Budget documents said anticipated slower growth will lead to deficits totaling $22 billion over three years starting in the 2024-25 fiscal year. Hochul previously said she wouldn’t raise income taxes but her budget extends an expiring corporate tax surcharge that generates around $800 million a year. She also proposed increasing the state taxes on a pack of cigarettes to $5.35 from $4.35.
Some of the biggest points of contention might come from non-fiscal issues the governor said she would bake into her spending plan. A governor has more power to enact policy by putting it into budget bills — they can essentially dare lawmakers to accept their plans or shut down the government by voting against a budget.
As Chalkbeat reports, Hochul proposed to eliminate a cap on the number of charter schools within New York City and allow charter operators to vie for about 85 charters that haven’t been used in other parts of the state. Charter school groups praised the proposal, but teachers unions and several legislators immediately opened fire.
In a fight for the masses, Hochul proposed banning the sale of flavored tobacco — which could put an end to hookah bars as we know them. “It’s harsh legislation, it’s unjust,” Assemblyman Nader Sayegh, a Jordanian-American Democrat from Yonkers, told the New York Post. “It’s not equitable to say: ‘Stop smoking hookah but you can go smoke pot.'”
We’re also already seeing some regional opposition on Long Island, where officials said they’re worried about her proposal to mandate denser zoning around train stations as well as the idea of increasing the payroll tax. It was incredibly controversial after it was first enacted in 2009, and Republicans hounded two Democratic senators representing the Island over the issue until they were defeated in 2010.
"As an individual point of contention, it probably wouldn't have the energy it had a decade or so ago. But you add it to expected pushback on [Hochul's] housing proposals and other issues and you have the makings of political synergy," Lawrence Levy, executive dean at the National Center for Suburban Studies at Hofstra University, told Newsday.
THE QUESTION: What’s a New Yorker with a moral compass supposed to do in this Super Bowl? Root for the Chiefs — who defeated our beloved Bills — or cheer for the Eagles, the longtime rivals of the Giants?
There’s not really a correct answer this week, so let me know what you’ll be doing. I might publish some of the best replies next week. Don’t follow sportsball? Drop me a line anyway at jimmy.vielkind@gmail.com with thoughts, feedback or to say hi.
THE LAST ANSWER: Jon Lovitz played Jay Sherman on “The Critic,” which I enjoyed watching as a kid.