Hochul budget would boost school aid, offer tax relief

ALBANY, N.Y. (AP) — New York would boost state school aid, provide sweeping property tax relief and deliver bonuses to health care workers over the next year if lawmakers pass a $216.3 billion budget outlined by Gov. Kathy Hochul on Tuesday.

Top legislative leaders are expected to keep negotiating with Hochul to finalize the budget, which must be in place by April 1. The final budget often largely resembles a governor’s budget proposal, with some tweaks sought by lawmakers.

SPENDING INCREASES

Hochul is proposing a 3.1% spending increase in taxpayer dollars for her 2022 proposed budget, which would run from April through March 2023.

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The Democratic governor says the spending increase is just below the rate of inflation.

School spending would increase by $2.1 billion, a 7.1% increase. New York raised taxes on high earners and corporations last year with plans to use millions in new tax revenues to keep increasing the state’s share of school aid.

Her budget also includes $1.2 billion in bonuses for frontline health care and mental health workers; workers earning less than $100,000 and who remain in the job for one year could earn up to $3,000 in bonuses.

Leaders of health care industry groups praised Hochul for reversing 1.5% across-the-board Medicaid cuts to health care providers and for proposing a 1% Medicaid rate increase.

TAX RELIEF

Hochul proposes offering $2.2 billion in one-time property tax rebates for low- and middle-income homeowners.

That rebate would arrive this fall, when Hochul is set to appear on the ballot for governor.

Hochul also wants New York to decrease tax rates for the middle class by $162 million by April 2023.

Currently, the state is set to wait until 2025 to fully phase in those long-planned tax cuts.

Several Democratic county officials praised Hochul for proposing to reverse policies under former Gov. Andrew Cuomo’s administration: The state would no longer divert local taxes to pay for state funding for local governments, and counties could raise sales taxes without approval from state lawmakers.

But Republican Assembly Minority Leader Will Barclay said Hochul’s budget proposal doesn’t do enough to address inflation or help taxpayers who don’t own homes.

Other critics want New York to roll back tax hikes and spend less on wealthy schools.

MARIJUANA SALES

New York has yet to launch recreational marijuana sales, but budget officials project the industry will bring in $56 million in revenues through March 2023.

New York expects to start issuing licenses for sellers of adult-use recreational marijuana sometime next year, state budget director Robert Mujica said Tuesday.

Some sales could also start in 2023, according to Mujica, who said officials expect licensing fees will make up most of the revenue at first.

Hochul’s budget also includes a $200 million fund backed by state and private dollars to provide capital and startup support for applicants from underrepresented communities.

CASINO, SPORTS BETTING

Hochul is proposing to allow New York to start accepting bids for three new casinos this year, one year earlier than previously planned.

Voters in 2013 approved a referendum to allow seven casino licenses but give exclusive gaming rights to upstate casinos until 2023.

Cuomo had said lifting that moratorium would benefit lobbyists for certain companies, including MGM and Sands, which have long pushed state lawmakers to allow casinos in Manhattan, Queens, Long Island and Westchester.

Mujica said the new casinos wouldn’t have to be built downstate.

In December, the state gaming commission started accepting preliminary plans for new casinos from several operators, including MGM’s Empire City Casino and Yonkers Raceway.

Meanwhile, New York’s recent launch of mobile sports betting is expect to bring in $249 million in revenue through March alone. That’s expected to climb to $357 million through March 2023.

SOARING REVENUE

New York is bringing in much more tax revenue than state budget officials expected last year.

The latest budget projections released Tuesday say New York will see $5 billion more in tax revenues through March than projected last fall.

That revenue jump is due in part to the state’s slowly recovering economy, as well as tax hikes lawmakers passed last year on high earners and large corporations.

Hochul’s budget would also make the vacation rental industry — including Airbnb — face state and local sales taxes.

RAINY DAY FUND

Hochul said rainy day funds would eventually make up 15% of the state’s budget under her multi-year plan.

But fiscal watchdogs want more funds set aside, and are worried about the state boosting spending while still relying on one-time federal pandemic aid.

“Will she be able to hold the line on spending where she has drawn it — or will her budget be a springboard for a broader election-year spending spree?” said Peter Warren, director of research at the conservative-leaning think tank Empire Center for Public Policy.

NO FUNDING FOR RENTAL AID, UNDOCUMENTED WORKERS

The governor says she’s willing to negotiate with lawmakers to use $2 billion of state taxpayer dollars on additional COVID-19 relief programs.

Interest groups statewide want lawmakers to use increased revenues in a number of different ways: struggling local governments; the state’s hefty unemployment debt; $5 billion for universal child care; a wage hike for home care workers; preventing public transportation fare hikes; passing universal health care; a proposed $1.3 billion new Buffalo Bills football stadium.

Liberal groups are also pushing $3 billion in aid for undocumented workers, and more funding for COVID-19 rental assistance aid.

Mujica, the budget director, said New York is pushing for more federal rental aid. And he said the administration should be cautious about expanding COVID-19 programs as the economy improves.