Reinvent Albany Priorities in Gov. Hochul’s FY 2025 Executive Budget
(Our first take based on the Governor’s Budget Briefing Book, not informed by detailed budget legislation.)
Thumbs Up
- $100 million for public campaign finance small donor matching funds.
- $158.4 million funding for State Board of Elections.
- Increased toll enforcement and fraud deterrence (particularly important as congestion pricing is turned on in 2024).
OK
- Limited expansions of NYC home rule:
- 4-year extension of mayoral control of schools (better NYC decides, not state).
- NYC can lower some speed limits (“Sammy’s Law” – better NYC determines, not state).
- NYS needs a much bigger effort to improve digital services and technology – the state should eliminate all but a few paper forms, and the public should be able to use smartphones to access all services.
- NYS needs to vastly boost support for local government efficiency and reorganization.
No Way
- $1 billion ($500 million new) taxpayer subsidies for computer chip makers (EUV Lithography).
- $400 million New York Works slush fund.
- Historically, we have been extremely skeptical of 421-a tax abatements of NYC property taxes for affordable housing and will need to see the budget bills to know how cost-effective/“efficient” the Governor’s proposal is. We are generally opposed to the state government abating NYC property taxes, which we see as an intrusion on home rule.
Irksome and Misleading
- The executive budget vastly understates the total size of state borrowing and spending because it does not include state authorities. NYS authorities spend about $50 billion a year and borrow 95% of all debt by state government entities (think MTA, Thruway, Dormitory Authority, et cetera).
- Revenue projections do not show the cost of billions in state tax expenditures. For instance, the film/TV tax credit alone will cost the state at least $700 million in FY 2025, which because of accounting gimmickry, is subtracted from revenue but not listed as an appropriation.
The Numbers in Brief
This is a conservative budget that increases overall state spending by 0.5%, less than the 2.4% average rate of inflation, while increasing spending by state taxpayers by about 4.5%. State sources will pay more because the budget assumes federal operating support will decline by about $4.7 billion (-5.3%). The Governor says her budget goals are to fund Medicaid and K-12 education, help NYC with the migrant crisis, all while not raising taxes, keeping borrowing low, and establishing a large cash reserve pegged at around $20 billion or 15% of state operating funds.
Budget Transparency and Process
The Governor and Legislature should also take steps to increase transparency and follow a regular, accountable budget process, like holding the quick-start meetings last November. This should include publishing basic financial plan tables with one-house and enacted budgets, drastically limiting the use of lump sum appropriations, avoiding use of messages of necessity, and ensuring that appropriations do not exempt pre-audit review by the Comptroller.