Hochul's $233 billion budget to maintain migrant aid, avoid tax hikes

ALBANY, New York — Gov. Kathy Hochul on Tuesday will propose spending at least $1.9 billion in the coming fiscal year to manage the ongoing migrant crisis, her top budget advisor said.

The money, which will allow New York City to continue to seek reimbursements from the state for migrant costs, will also sustain spending for housing, legal aid and job placement for the surge of migrants, Blake Washington, the governor’s budget director, said in an interview Monday with POLITICO.

Hochul on Tuesday will propose a $233 billion spending plan — a budget that closes a $4.3 billion gap and does not include any broad-based increases in taxes.

Hochul wants a 2.4 percent increase in school aid, which is smaller than in recent budget agreements and likely to be a point of contention in the negotiations with the Democratic-dominated Legislature.

Progressive advocates and lawmakers, too, are expected to press Hochul to agree to a tax increase on the state’s richest residents. They have pointed to a steady tide of middle-income and low-income earners who have left the state for less expensive areas of the country as the state facing a housing supply crunch.

The budget proposal from the governor will kickstart the roughly three-month talks over taxing and spending in Albany with the politically fraught migrant crisis looming over the discussions.

An on-time spending plan is required by April 1, the start of the state’s fiscal year, but negotiations often blow through the deadline.

New York City Mayor Eric Adams, who is also unveiling his own budget plan Tuesday in a separate presentation, has pushed state officials for additional resources to help manage the flow of more than 160,000 migrants since 2022.

Adams has decried the migrant crisis and its effect on the city’s own budget and has instituted spending cuts affecting services, though some cuts are being partially reversed.

Hochul and state lawmakers last year agreed to $1.1 billion in spending for migrant aid and support, including money that Adams could seek through reimbursements. Since then, spending increased to nearly $2 billion to include migrant housing at sites across the city, including the federally-owned Floyd Bennett Field in Brooklyn.

Hochul and Adams, who have stressed their productive relationship, have urged federal officials to act as well. But a polarized Congress, for now, is unlikely to approve federal aid to states that are grappling with an influx of people.

Republicans want Hochul and Adams to apply further pressure on President Joe Biden to take a more aggressive approach to border security.

“We can slow the flow, ensure border security and then rightfully help those who are honest and have the right to enter this country through the asylum-seeker process,” Rep. Marc Molinaro (R-N.Y.) told reporters during a news conference Monday.

New York officials are also piecing together a budget amid broader demographic changes in a state that has experienced nation-leading outmigration since the onset of the pandemic.

New Yorkers are getting older, presenting a challenge for policymakers to address an aging population while still funding public schools.

“We have fewer school children, we have fewer people in our higher education institutions, but at the same time we have a growing aging population, many of whom avail themselves of Medicaid,” Washington said in an interview Monday.

Hochul’s budget will include an additional $825 million in funding to schools, including a $500 million hike in direct aid.

Washington pointed to the escalation of direct aid to schools in recent state budgets as well as billions of dollars in additional federal aid. The increased spending has boosted many school districts to the point in which their cash on hand have reached a legal limit, he said.

“There’s just a lot of money that’s been, rightfully so, put into the public schools in the last several years,” Washington said.

Hochul will also propose an additional $90 million in funding for SUNY and CUNY. The proposal does not include tuition increases. A Hochul-proposed tuition hike was rejected by state lawmakers last year.

Medicaid spending would increase by 10 percent, due in part to higher-than-expected enrollment in the program and the cost of long-term care services for elderly people.

The state’s coffers have benefited from a post-pandemic boom in tax revenue, which has since flattened out. New York must also contend with future budget gaps as spending continues to outpace anticipated revenue.

The budget gap next year is expected to reach $5 billion and $5.2 billion the following year. It is estimated to balloon to a $9.9 billion gap after that.

Still, Washington was confident those holes could be filled.

“We view that as manageable,” he said.